Semiconductor Industry In México: The Next Ten Years

But this story starts two years ago (or maybe sometimes before), when I was move to Guadalajara.

A brief story

Was the fall of 2022 when I was a meeting with the Dr. Ramón Parra, Professor, Researcher and Director in the CINVESTAV-GDL, one of the more relevant research institutes on the country.

Ramón has a lot of experience in the semiconductor industry, he has a lot of patents, published papers and he has teach so many students as professor.

He was collaborating with some of the most relevant enterprises in the region like Hewlett-Packard, Mabe and Intel, and he was created the Jalisco on Chip initiative for impulse the local development to the semiconductor industry.

When I talk with him two years ago, I was working in Platzi, one of the most relevant edtech startups in latin america, and I was created Robots Latam, a virtual community for students and enthusiasts of the professional robotics.

One year before, we was stream an interview with him for de Robots Latam community, where talked about the Jalisco on Chip initiative and the CINVESTAV.

The meet

When I arrived to Guadalajara, we have a large meeting about the Chip War between United States and China, and how that was going to change the global balance in the, until now, static semiconductor industry, and how México was be impacted by that changes.

On that meet, he introduced me to Rodrigo Jaramillo, Director and Co-founder of Circuify Semiconductors, and he join us to the conversation about the future of semiconductor industry.

The game changes

On August 9 of 2022, Joe Biden signed the Chips and Science Act, a law to change the semiconductor game to tackle the Chinese progress in the area.

The Chips Act authorizes $280 billions of dollars, for promoting the semiconductor industry in the United States and North America as a single region.

This Act pretends reforge all supply chains, from R&D to manufacturing and suppliers, and its aimed to competing with China.

Of course, the Act impacts México, which has become in one of the top candidates to receive direct investment and to be the new location of manufacturing chips and supplies for the industry.

At that meeting we talked about the main challenges of México for take advantage in that new world, how can México transform this challenge into an opportunity?, what players, laws and strategies are necessary to make this works.

Things to be better

The common point and conclusion was that we, as country, need forge our own ecosystem, our local hub, not only as suppliers or workforce, but as a local hub with his own ecosystem of entrepreneurs, specialized talent, startups and supply chain.

This implies a vicious circle: As country, we need more qualified people for make an industry, but at the same time, we need an industry for make this qualified people.

That’s a bad cycle, a hard to crash cycle, but not is impossible.

Two years later, the last week, I talked to Rodrigo one more time, and the problem it’s the same, we need more qualified people.

Circuify tackle this problem with his own education program, sometimes he makes a bet on potential people and sometimes wins.

But that’s not sufficient for satisfy the future demand, now México has potential, but needs more people, investment (private and public) and a lot of hard work to transform that potential into results.

Challenges and opportunities

Last week, FUMEC (México-United States Foundation for the Science, in Spanish), launch a publication in collaboration with USAID, about the challenges and opportunities of México-United States relationship for building a semiconductor hub as region.

Circuify, of course, is one of the key players mentioned in the document.

The document, called “México Nearshoring Semiconductor Roadmap”, shows an entire overview of the topic, and lists some key steps in the process of building a new semiconductor industry in México.

One of the most interesting parts, is the mention of direct investment from United States to strong the México industry.

Explains how México is a real and serious option to USA for this investment, using the Cars Manufacturing industry as example.

Some challenges mentioned in the document are:

Unreliable Infrastructure

México has some problems for providing basic resources like energy, water, transportation and telecommunications infrastructure. That’s a great disadvantage to the country.

Specialized semiconductor facilities

México needs more specialized infrastructure like clean rooms, equipment and a better connection between academy and industry. We need to create bigger, better and harder networks.

Talent Pool

México has a lack education system, that not produces the necessary technical specialization for even the most basic semiconductor requirements. We need better education strategy for the growth of local talent at short time.

Security

A major challenge in México for industrial development, is the security. Reduce or avoid the security threats are a key challenge, observed by the international investment.

At present, some enterprises like Micro, it was started to invest in México, and everyday more key players in the United States sees México as a manufacturing option.

But key challenges are bigger and complex.

An uncertain future

As you can see, this is a bigger opportunity, but requires tackle big challenges, from education and security, to specialization and infrastructure.

Then, two years after, I would like to say that we go winning this challenge, but no, and this is very sad for me. We can work harder expect to the trend to change, but the only the time can say the truth.

Next ten years aren’t written, but are a very important window of time for define the win or fall for México as an industrial key player.