According to industry insiders and analysts, a new hub for Taiwanese semiconductor manufacturers could be established in southern Mexico, backed by the U.S. and Mexican governments. U.S. President Joe Biden and Mexican President Andres Manuel López Obrador have reportedly agreed to form high-level teams to boost collaboration in the semiconductor sector.
Taiwanese contract manufacturers have already set up factories in Mexico to avoid the U.S. chip export ban on China. They are hopeful that their upstream suppliers, such as chipmakers, will follow suit. Analysts note that while many Taiwanese router motherboard manufacturers had a significant portion of their production in mainland China, they are now being encouraged by U.S. customers to relocate to Mexico and other Southeast Asian countries like Thailand and Vietnam.
Last year, Biden enacted the CHIPS and Science Act, allocating $52.7 billion for American semiconductor R&D and manufacturing. The U.S. government is also offering a 25% investment tax credit for capital expenses related to semiconductor manufacturing.
Gina Raimondo, U.S. Secretary of Commerce, emphasized the need for U.S.-Mexico collaboration to counter China in the semiconductor industry. She pointed out that while the semiconductor sector’s annual revenue in China and Taiwan reached $60 billion, it was only about $3 billion in North America.
José Abugaber, President of the Confederation of Chambers Industrial in Mexico, confirmed Taiwan’s interest in producing chips in Mexico for the North American market. Taiwan has been encouraging its semiconductor companies to move their operations from mainland China to other locations, with TSMC’s chip foundry in Arizona being one of the largest projects.
During the North American Leaders’ Summit, Biden revealed an agreement with Mexico and Canada to coordinate investment in semiconductor manufacturing across the continent. The three countries will work together to map out semiconductor supply chains and identify unmet needs.
Several Taiwanese companies, including Kinpo Electronics Inc and Taiwan Surface Mounting Technology Corp, have already moved or are planning to set up factories in Mexico. Analysts predict that more Taiwanese companies will expand their production lines outside mainland China due to the U.S.’s chip export ban and local policy risks.
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