Clifford Chance
Mexico's plans to develop its semiconductor industry: challenges and opportunities
28 January 2025
Recent global developments accelerating the push for geographical diversification of semiconductor production include positioning Mexico as a primary destination for the chip manufacturing industry over the next decade. Companies will seek to take advantage of recently announced tax incentives, an abundance of low labor costs and proximity to the U.S. as they advance nearshoring agendas.
As a result of rising strategic competition between the United States and China and security concerns over Taiwan’s dominant position in global chip manufacturing, the semiconductor industry is experiencing unprecedented challenges. Currently, Taiwan controls over 90% of the global market in the production of advanced semiconductors but political and economic risk exposure is increasingly leading to nearshoring of semiconductor manufacturing and production. In a recent study, Boston Consulting Group estimates that approximately US$3 trillion will need to be invested in the industry over the next ten years to meet the increasing global demand for semiconductors. Such an investment will require collaboration across governments and the private sector globally to make the supply chain more resilient.
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