Circuit of Success: Electronic Business in Mexico

Mexico's electronic business is rapidly advancing, playing a pivotal role in the global electronics industry and significantly contributing to the country's economic strength. Over the last decade, Mexico has become a leading supplier of electronic products to the US market due to significant FDI in the sector. This growth is supported by the presence of top global electronic manufacturing services (EMS) providers, attracted by its skilled and affordable labor force and many strategic advantages.

Energizing the Future: Advancements in Mexico's Electronic Production

The electronic industry in Mexico stands as a cornerstone of the country's manufacturing landscape, significantly contributing to its economic vigor and establishing its strategic position in global electronic trade. According to *Data Mexico, between January and September 2023, the sector welcomed USD 605 million in FDI, showcasing the world's continued confidence in Mexico's electronic business capabilities. This period saw investments distributed across intercompany accounts, profit reinvestment, and new ventures, culminating in a substantial USD 25.2 billion FDI from 1999 to 2023. Leading recipients like Baja California, Mexico City, and Jalisco highlight the sector's appeal, supported by significant global investments from the United States, Japan, and South Korea.

As we look towards 2024, Mexico’s electronic production is making transformative advancements, including sustainable practices, IoT expansion, AI technology, and 5G deployment, alongside a focus on supply chain resilience and vertical integration. These developments and substantial FDI underline the electronic industry's critical role in the national economy and the international market. Mexico's electronic sector is not merely participating, but leading the way toward an innovative, sustainable, and efficient future, offering fertile ground for companies to leverage electronic labor, production, and trade advantages.

Electronic Manufacturing in Mexico

In Mexico’s electronic business, we find an industry poised at the crossroads of innovation and growth. Specifically for products in the NAICS 334 Sector, the electronic manufacturing landscape in Mexico encompasses a diverse array of products for both consumer and industrial markets. This sector includes the manufacturing of:

• Computer and Peripheral Equipment (NAICS 3341): This category involves the production of desktop computers, laptops, printers, and other peripheral devices that serve as the backbone of personal computing and office automation.
• Communications Equipment (NAICS 3342): Products under this category include wired and wireless communication devices such as smartphones, routers, and base stations that are essential for modern connectivity.
• Audio and Video Equipment (NAICS 3343): This encompasses the manufacturing of entertainment and information devices, including televisions, speakers, and professional audio equipment, catering to both consumer preferences and professional settings.

The diversity of products within the electronic manufacturing sector emphasizes Mexico's extensive capabilities, mature supply chain ecosystem, and rising prominence in the field. In addition, favorable trade agreements, particularly the USMCA, have spurred more growth in electronic manufacturing in Mexico, setting it apart from traditional electronics manufacturing players, such as China and India. Other factors contributing to its growth include the trend of nearshoring driven by an increasing focus on business continuity and geopolitical shifts that have enabled Mexico to surpass China in trade with the United States. These elements, added to Mexico's many other benefits, including its skilled and cost-effective labor force, reveal Mexico's growing popularity in the global electronic manufacturing landscape.

Guadalajara, heralded as Mexico's Silicon Valley, is at the forefront of the nation's booming electronic sector. This city has become a crucial hub for software development and the establishment of EMS companies, significantly contributing to Mexico's overall gross production. According to data from the latest economic census from 2019 published on the *Data Mexico website, the gross national production in the electronic sector soared to 197.7 billion pesos, with the state of Jalisco, Guadalajara's home, leading at 42.3 billion pesos. Chihuahua closely followed, showcasing its own substantial contributions with 27.8 billion pesos.

These statistics show the significant role both regions play in Mexico's electronic manufacturing landscape, fostering innovation and generating substantial economic output. This impressive performance highlights Mexico's strategic positioning as an ideal destination for electronics contract manufacturers in Mexico and EMS businesses, capitalizing on its vigorous ecosystem to drive production excellence and innovation within the global electronic business arena.

Circuiting Success with American Industries’ Administrative Support Services

Establishing or relocating electronics manufacturing services to Mexico presents many strategic advantages, notably the proximity to the U.S. market, access to a skilled workforce, and the benefits of trade agreements like the USMCA. American Industries emerges as a key partner in this journey, offering a shelter program that streamlines the process, ensuring a smooth transition and operation for international companies. Through shelter partnership and comprehensive administrative support services, American Industries reduces the learning curve of new manufacturing landscape.

A testament to the effectiveness of partnering with American Industries is the success story of WKK, a company that transitioned its operations from Asia to Mexico. In the face of a global pandemic, American Industries provided , from meticulous site selection to the seamless start-up of operations, embodying the resilience and adaptability crucial for business continuity. This partnership facilitated WKK's expansion in North America, demonstrating the potential for growth and success through strategic collaboration.

The strategic benefits of manufacturing in Mexico, especially for electronics companies, are many. Proximity to the U.S., a robust trade framework, and a talented labor pool are just the tip of the iceberg. American Industries stands out as an essential partner for international companies aiming to establish or broaden their operations in Mexico, offering a shelter program and partnership that pave the way for success. With American Industries, companies gain not just a service provider but also a partner vested in their success.

Are you interested in exploring the electronics industry in Mexico further or receiving a business case analysis at no cost? Contact American Industries today. Let us help you unlock the full potential of your business in Mexico's thriving electronic sector.

* Fabricación de Equipo de Computación, Comunicación, Medición y de otros Equipos, Componentes y Accesorios Electrónicos: Salarios, producción, inversión, oportunidades y complejidad | Data México (economia.gob.mx)