ASU, Mexico to Increase Semiconductor Production in North America

Esteban Moctezuma Barragán, Mexico’s Ambassador to the US, and Arizona State University (ASU) signed a Memorandum of Understanding (MOU) to increase the production of semiconductors in North America.

The agreement seeks to promote collaboration between ASU and universities and businesses in Mexico, as it is critical for the region to reduce their dependence on Asian manufacturing, reported  ASU. US President Joe Biden signed the bipartisan CHIPS and Science Act earlier this year to inject US$52 billion and accelerate the US’s semiconductor manufacturing capacities. 

The act also includes US$500 million for international agreements, as it is not feasible to have all semiconductor manufacturing in the US. ASU aims to provide guidelines and training for universities in both the US and Mexico, while also seeking to increase the current production capacity of microelectronics manufacturers. During the past few decades, the US had reduced its semiconductor production from almost 40 percent in 1990 of total global production to 12 percent in 2022, said Moctezuma. 

“We need to continue working in this effort of bringing production back to North America. It is not just a matter of trade but of technology, education, competitiveness, innovation, workforce development, regional security and geopolitics,” said Moctezuma. He also highlighted the importance of reducing dependency on Asia countries because if the supply chain is broken, the world will likely experience a global economic crisis. Semiconductors are also essential to the automotive sector, said Moctezuma: “Semiconductors make up 40 percent of the total cost of a new car today.”

Mexico has a unique opportunity to increase its market share as the automotive industry undergoes an electromobility transformation. The country’s strengths include its privileged geographical position, economic and social stability, low taxes and highly qualified workforce. However, much remains to be done, not only in Mexico but in North America, to fulfill these expectations.

Key players from Mexico’s automotive industry agreed that through investment, the country could become a powerhouse in electrification, as reported by MBN. “We will be able to meet the expectations. A huge avalanche of investments is coming to the country and we need to have the infrastructure to sustain these new investments, from the quality and safety of the roads to the functioning of the borders and customs,” said Oscar Domínguez, President Operations, Lear Corporations.