American and Canadian electronics manufacturers, in particular, have taken advantage of Mexico’s proximity, growth rate, capacity and ease of access by air, land, and sea, to reduce operating costs and optimize their supply chains. The growth of electronics manufacturing in Mexico illustrates why more North American businesses are choosing to ‘nearshore’ manufacture closer to home.
The manufacturing and business specialists at El Grande Group would like to provide you some important insights into the electronic manufacturing sector in Mexico.
Positive Electronic Manufacturing Trends in Mexico
In addition to the general benefits of manufacturing in Mexico, there are a number of other advantages of nearshoring electronics manufacturing operations into the country. This high-growth sector has been a crucial catalyst in the development of an educated and experienced workforce that can compete globally in the 21st century.
- In 2018, the total value of manufacturing in Mexico was 7.3 trillion pesos (US $380.1 billion).
- The Bajío region (home to many global electronics manufacturers as well as El Grande Group’s industrial park for North American manufacturers) contributed 21.5% of total production in the manufacturing sector.
- Mexico’s high-technology exports were valued at $50.4 billion US dollars in 2017 and are growing at an average annual rate of 5.69%.
- Manufacturers doing business in Mexico include household names such as Samsung, Foxconn, Intel, Sharp, Plantronics, Panasonic, and Flextronics, as well as smaller North American firms that can benefit tremendously from building relationships with OEM’s and Tier I, II & III organizations in Mexico.
- Some of the highest-grossing electronic products manufactured and exported from Mexico include:
- Integrated circuits
- Computer CPU and memory chips
- Network switches
- Consumer electronics
- Audio and video goods
- Circuit boards
- Mobile phones
- Electronic appliances
- In total, about one-third of electronics manufactured in Mexico are bound for the Information Technology sector.
For many businesses in the United States and Canada, ‘nearshoring’ to Mexico may be the only way to keep pace with the process of globalization as it expands far beyond the traditional centers of offshore manufacturing (i.e., China and other countries in Asia-Pacific). Labor costs are becoming less of an incentive of moving their production to these countries as businesses need an educated labor force with high-tech and specialized skills, not just workers or employees.
A Workforce of the Future
The success of electronics manufacturing in Mexico is a testament to the country’s investment in the education of its labor force, particularly engineers — the country graduated 40,000 engineers in 2000 versus nearly 114,000 by 2015. While countries such as China and India have made similar investments in education, labor costs have skyrocketed in these countries over the past decade while remaining relatively stable in Mexico. In short, labor is cheaper in Mexico and just as educated as any other global region — a win-win for North American manufacturers looking to cut costs and grow revenue over the long term.
Whether your company is looking for a more efficient supply chain, new markets, or an educated and experienced workforce, Mexico has proven itself to be a global center for manufacturing in general and electronics manufacturing in particular. It’s proximity to the United States and perfectly situated between two oceans and economic powerhouses such as Canada and Brazil, Mexico will play a leading role in electronics manufacturing in the 21st century.