This report examines the opportunities and challenges facing Mexico’s semiconductor ecosystem. Semiconductor firms operating in Mexico focus primarily on assembly, testing and packaging as well as semiconductor design. These firms benefit from Mexico’s openness to trade, a large and experienced workforce, research centres that collaborate on semiconductor-related technologies and innovation, and a privileged geographic location. Despite these strengths, the report identifies areas for improvement that could help Mexico further enhance its semiconductor ecosystem. Using both quantitative and qualitative analysis, as well as insights from a diverse group of stakeholders, the report offers policy recommendations across five key themes: co-ordinating and aligning the institutions and strategies responsible for the semiconductor ecosystem, developing skills and human talent, realising the potential of local semiconductor research and innovation, expanding semiconductor-related infrastructure - particularly electricity and water - and supporting semiconductor firms to integrate into global value chains.
Promoting the Development of the Semiconductor Ecosystem in Mexico
Abstract
Executive summary
The semiconductor industry, the backbone of modern digital and electronic technologies, is witnessing significant shifts in its global landscape. The high concentration of critical segments of the semiconductor value chain in a limited number of regions increases vulnerability to disruptions. Consequently, in recent years, many economies have sought to enhance the resilience of the semiconductor value chain by developing a local semiconductor ecosystem to strengthen their role in this strategically important sector.
In this context, Mexico – which is already a location for semiconductor design and back-end manufacturing – is attracting increased interest from some of the world’s largest semiconductor firms. This report analyses the opportunities, challenges and policy levers to support Mexico’s semiconductor ecosystem and identifies policy recommendations to help its development. The report contributes to a better understanding of policy tools that can enhance the resilience of the global semiconductor value chain.
The report examines both quantitative and qualitative evidence. Quantitative analysis focuses on Mexico’s existing semiconductor industry and electronics sector, examining its evolution and performance using aggregate and microeconomic data and analysing key enabling factors, including market structure, foreign direct investment and its integration into global value chains. Qualitative analysis draws on interviews with governmental and non-governmental stakeholders to map the institutional and policy landscapes shaping the semiconductor ecosystem in Mexico, with in-depth analyses of the policies affecting skills and education, research and innovation, infrastructure and the legal and regulatory environment.
Mexico’s semiconductor ecosystem has significant strengths. Mexico’s openness to trade and trade facilitation measures, its skilled and experienced workforce, an innovation ecosystem with several research centres focusing on semiconductor-related technologies and its privileged geographic location close to large semiconductor manufacturing bases and markets in the Americas are important advantages. Despite these strengths, Mexico still faces some challenges in developing its semiconductor ecosystem. To overcome these challenges and capitalise on emerging opportunities in the semiconductor industry, this OECD report offers policy recommendations structured into five main areas:
Co-ordinate and align strategies to foster the semiconductor ecosystem, by establishing a co-ordination mechanism for all relevant governmental and non-governmental stakeholders involved in semiconductor policy, developing a national semiconductor strategy, and leveraging data infrastructure to inform policies and monitor the implementation of this national semiconductor strategy.
Promote the development of skills and human talent for semiconductors, including by strengthening science, technology, engineering and mathematics (STEM) and English-language education, expanding targeted support to reduce student dropout rates and encourage female participation in STEM, and improving teacher training. It is also important to revise the curricula for higher education and vocational education and training (VET) to reflect the needs of the semiconductor industry, enhance the appeal and content of VET, including by developing VET trainers, and promoting “brain circulation” while mitigating “brain drain” through increased emphasis on semiconductor research and innovation.
Realise the potential of local semiconductor research and innovation, by facilitating the acquisition of specialised semiconductor equipment for research purposes, incentivising the commercialisation of research, further strengthening academia-industry linkages and facilitating the involvement of researchers in both public and private sector activities.
Improve the enabling infrastructure required for further semiconductor investments, by encouraging private investment in renewable energy through the streamlining of the permitting process and facilitation of energy auto-production by semiconductor firms, incentivising private investment in technologies for water and wastewater management, and reducing the insurance and security costs faced by firms in road transportation.
Support semiconductor firms to integrate into global value chains, by enhancing the digital one-stop shop to facilitate foreign investment and facilitating trade in relevant semiconductor inputs through a customs programme for a predetermined list of key inputs and through electronic customs scans.
