Supporting the Rise of Semiconductor Manufacturing in Mexico with Shelter Services

Demand for semiconductors has surged as the need for microchips has become a necessity for everything from smartphones to automobiles to medical devices, and anything else electronic. Navigating the production of semiconductors became an even bigger part of the conversation in 2020 when industries faced shortages and the risk of securing reliable supply chains became a concern.

Historically, Taiwan has been the largest semiconductor producer in the world, with TSMC as its leader, though there’s a risk in supply chain reliance when delivering cost- and time-effective delivery to the U.S. and the rest of North America. In response to this potential dilemma, and to address the continued digital demand, the U.S. committed to a semiconductor investment of $50 billion through the CHIPS and Science Act in 2022.

This included promoting production in the U.S. and a partnership with Mexico to create a more resilient, sustainable supply chain and “grow and diversify the global semiconductor ecosystem.” However, despite the push for U.S. production, many semiconductor manufacturers still rely on Mexico for its labor-intensive assembly roles to save costs without sacrificing quality or time.

Though Taiwan and other Asian countries may still be viable semiconductor markets, securing a dependable infrastructure with a steady supply chain is what’s leading many manufacturers to consider expanding production to Mexico. Even TSMC has announced its own multi-billion dollar investment into a Phoenix, AZ semiconductor factory with additional plants throughout the state.

To keep pace with the rising demand for semiconductor manufacturing in Mexico, leaders are looking to shelter companies to help them get production up and running as quickly as possible.

Implementing Shelter Services for a Quick Startup Time

When manufacturing in Mexico, the safest and quickest way to launch production is by working with a shelter company. Under a shelter, U.S. and other foreign manufacturers are not exposed to local legal authorities, which helps to minimize their risk and liability. Plus, they can immediately take advantage of the tax-saving benefits of the IMMEX program.

Additionally, manufacturers save on labor and infrastructure costs and receive HR and recruiting support. Manufacturing in Mexico remains a global strategy partly due to the availability of Mexico’s skilled workforce. Universities often partner with manufacturers to develop training programs to fulfill their necessary industrial roles. For instance, Arizona State University (ASU) has committed to assisting higher educational institutions in Mexico with workforce development specifically for semiconductor manufacturing.

As innovation and technology continue to develop, it’ll become exceedingly challenging to keep up with demand and contain costs. The unique value a Mexico shelter company offers U.S. and other foreign manufacturers new to setting up production in Mexico to do both.

Operating under a shelter allows seamless entry into manufacturing in Mexico with a startup time of three to four months. The shelter company takes on all administrative responsibilities so manufacturers can focus on production. It also allows companies to scale as needed or eventually transition to a standalone entity.

We are here to help manufacturers adapt to the ever-changing landscape and stay competitive as they expand production.

For more information about how our shelter services can support your manufacturing goals, contact IVEMSA today.