Background and Relevance of the Semiconductor Industry
This week, a working meeting of the T-MEC Implementation and Review Commission in the Mexican Senate took place to discuss challenges facing the semiconductor industry and value chains in Mexico. While there is a path for growth, time constraints and bottlenecks pose significant challenges.
The Importance of Semiconductors
Senator Waldo Fernández, who chairs the commission, likens semiconductors to “the steel of the 21st century.” They are ubiquitous, essential in military conflicts, consumer electronics, and automotive industries. With an estimated market value of nearly $630 billion by 2024, semiconductors hold immense economic and social value—more than 1.5 times Mexico’s federal budget for the same year.
Competing with Asia Without Public Subsidies
Carlos Rebellón, Vice President of Semiconductors at the National Chamber of the Electronics, Telecommunications and Information Technologies Industry (CANIETI), accurately summarized the main challenge: competing with Asia without significant public subsidies. To overcome this, Mexico must leverage its logistical proximity to the world’s largest market, its manufacturing base, and the rules of the North American trade agreement.
Mexico’s Opportunity in the Semiconductor Sector
Mexico ranks 10th in electronic sector exports and is one of 17 countries with a presence in the semiconductor industry, according to CANIETI. Adding its automotive sector presence, Mexico’s potential for gains in the chip industry becomes evident.
Key Challenges and Solutions
- Talent Shortage: According to a Manpower report, 70% of employers struggle to find suitable candidates, with the shortage rising to 77% in advanced electronics roles. STEM graduate supply lags behind the demand generated by industrial relocation, despite Mexico’s talent pool.
- Limited Basic Resources: Northern Mexico’s hot and dry climate, along with the Bajío region’s developed manufacturing industry, presents water infrastructure and electricity network pressure challenges. Both require modernization to support semiconductor growth.
- Public Finance Restrictions: Accumulated public deficits limit fiscal incentives and investment capacity for infrastructure and worker development programs.
Progress Despite Limitations
Despite constraints, progress has been made. Jalisco’s Tech Hub Act offers regulatory fast-tracking and dual design training, while Baja California integrates ATP lines for Qualcomm and Infineon. Chihuahua anchors automotive testing production, proving effective coordination’s potential.
The Role of the Senate
The Senate’s T-MEC Follow-up Commission proposes a Consultative Council, bringing together the federal executive, state governors, industry, and academia to support T-MEC review efforts in 2026.
Pulling Together: The Power of Collaboration
“Only when two forces pull equally does the plow cut a deep, straight furrow.” Without synchronized efforts, Mexico’s semiconductor sector will remain underdeveloped.
Prioritizing Development
To ensure a prosperous semiconductor sector, prioritize: logistics corridors, transmission lines, and water treatment infrastructure where industrial demand already exists. Utilize APP schemes and FONADIN, state funds for semiconductors, mirroring partnerships financing Iberdrola plants.
Developing Design and ATP Talent
To foster rapid design and ATP talent development, consider more scholarships with waivers, bilingual bootcamps, dual training programs, internships, and more university-company partnerships like those in Jalisco for over two decades.
Regional Content for T-MEC Benefits
Though the T-MEC review will be a unique and complex process, regional content for benefits in sectors like automotive and semiconductors will be unavoidable. Propose gradual threshold proposals in 2026 to encourage regional content without burdening SMEs.
Unified Effort: The Path Forward
If all parties work together—Senate and executive, states, private initiative, universities, and R&D centers—combined force can open a deep, fertile furrow. Otherwise, Mexico risks watching others cultivate its future.
