Semiconductor scarcity has been a major issue for the automotive industry since the COVID-19 pandemic disrupted automakers’ global supply chains. Semiconductor demand increased in the tech and the automotive sectors, and global supply has been unable to catch up. Under these circumstances, two semiconductor manufacturers are interested in investing in Queretaro.
At least two semiconductor companies are interested in setting up in Queretaro, said Esaú Magallanes Alonso, State President, National Chamber of the Transformation Industry (CANACINTRA). Magallanes highlighted that these businesses will stay in contact with the state government of Queretaro through the Ministry of Sustainable Development (SEDESU) to give the proper follow up to their plans to invest.
The interested companies are both Mexican. "They are just looking at the possibility of setting up here, in fact, we are just looking at it with SADEDSU so that they can take over what is missing. [The companies] will decide if they want to stay," said Magallanes, as reported by El Economista.
Mexico’s participation in the semiconductor manufacture chain was addressed during the US-Mexico High Level Economic Dialogue (HLED), which aims to provide a platform to increase regional prosperity. “There is still a shortage [of semiconductors], and in the meeting Mexico had with the US, one of the main proposals discussed was the creation of semiconductor production plants in Mexico; I think it is a great opportunity for Queretaro and for Mexico, that the US is asking us to create the plants here,” said Magallanes.
The automotive industry has been largely affected by semiconductor scarcity despite many efforts to tackle this problem, which is caused in part because vehicles require an increasingly larger number of semiconductors. In 2017, vehicles required about 700 semiconductors on average. In 2022, they require about 1,600, said Guido Vildozo, Senior Manager Americas of Light Vehicles Sales for Forecasting, S&P Global Mobility, as reported by MBN.
Vildozo expects vehicle production to stabilize in the next two years “[Production] is growing 15-18 percent but the additional 7 percent of semiconductors per unit increase, coupled with the fact that the hybrid and plug-in hybrid cycle will also increase, puts pressure on semiconductor production. That is why [automotive manufacture] will not be normalized until 2024,” he said.