Mexico, at the epicenter of microprocessor manufacturing

The relocation of production chains changes its coordinates, seeking to approach the largest consumer market: North America

As has already been mentioned in countless articles, reports and even documentaries, there are many uses that microprocessors currently have. Fundamentally, they are responsible for giving life to any electronic device that people can imagine, be it from a cell phone, tablet, a digital toaster, a computer, to cars, airplane dashboards or even in the aerospace agency there are thousands of devices that use this kind of microcomponents. Now, in recent times, the relocation of production chains is changing their geographic coordinates, seeking to approach the largest consumer market in the world: North America. Products that were manufactured since the late 90s in the Far East and Asian countries, as well as many companies that were created in that region of the world, towards this century, are beginning to look to the West, but from a business and investment perspective. The company Foxxcon is a Taiwanese multinational based in the Tucheng District, in the province of New Taipei, which manufactures electronic products on request. Within the world of electronic devices, it is known as the largest manufacturer of components of this nature worldwide and the largest exporter from Taiwan. Foxconn is primarily an “original design manufacturer” (by its initials in English, that is, a company that is dedicated to manufacturing its own products for others), and its clients include the main technology companies in the United States, Europe and Japan. Foxconn’s products include the iPhone, iPad, Kindle, PlayStation, Xbox 360, and GoPro cameras. It could be said that its most notable presence in the global manufacturing market came when it bought 66% of Japanese company Sharp Corporation in August 2016. This strategic move was followed by the appointment of Young Liu, its new president after the retirement of its founder, Terry Gou, effective July 1, 2019. Its current coordinator, Young Liu, was a special assistant to former president Terry Gou and director of the S (semiconductor) business group. According to many analysts, the transfer signaled the future direction of the company, highlighting the importance of semiconductors along with technologies such as artificial intelligence, robotics, and autonomous driving, after Foxconn’s traditional core smartphone assembly business has matured. But the good news and promising prospects do not end here for the oriental multinational, since, in March of this year, the president and CEO of Foxconn, Young Liu, predicted that the company would increase its turnover by 40% in 2023, in the AI-based server segment, which led to an upward revision of its growth prospects for 2024. Foxconn has factories in Asia, Europe and Latin America. Between them, they assemble around 40% of all consumer electronics products produced in the world. In short, it has research and development centers in China, India, Japan, Vietnam and the United States. In this regard, various national and international media, as well as a multitude of communicators, announced last week that the Taiwanese giant will build a mega semiconductor manufacturing plant in the state of Jalisco. Governor Enrique Alfaro himself gave an account of the above. The reality is that Foxconn, with sales of almost 214 billion dollars in 2022, will not build a chip or semiconductor factory, but an assembly plant for the GB200 superchips of the company Nvidia (an American company that develops graphics processing and advanced computing technologies) which, in 2023, had revenues of almost 27 billion dollars. This is relevant because, according to specialists in the field, the process is divided into three main stages: design (Nvidia in the US), manufacturing (TSMC in Taiwan) and assembly of the GB200 (Foxconn in Mexico). In this sense, the new plant in our country, which will be the largest in the world to assemble Nvidia’s GB200 superchips, perfectly illustrates the global division of labor in the industry and which Mexico has begun to insert itself into with great force, since the presence of Foxconn in the country is not new and it already has a factory in Tijuana, investing more than 500 million dollars in the state of Chihuahua. Despite this, it seems that this infrastructure does not meet the requirements of the high demand that exists in the international market. The difference in investment between a chip factory and an assembly plant is substantial. A state-of-the-art chip factory requires a significant investment, ranging from 20 to 30 billion dollars, while Foxconn’s total investment in Mexico, including the Guadalajara plant, is estimated at around 764 million dollars. This distinction reflects Mexico’s current position in the global semicon.

Nota publicada originalmente en el Heraldo de México