Advanced Technology Manufacturing in Mexico
DJ Hill, Chairman and CEO, Silicon Border
Development
Economic events of the past year have led many high-technology companies to examine their
assumptions about growth in their own industries. Total market size, growth rates as well as product
and pricing strategies are all under revision as individuals and enterprises adapt to a new set
of economic realities. Global manufacturing strategies in support of an enterprise's larger
objectives should be examined and revised, if necessary, at the same time. The means and
mechanisms necessary to provide support to corporate objectives should be identified and
quantified wherever possible. Risk mitigation from possible adverse but foreseeable events
should be a key element of this analysis as well.
A well thought out strategy for a global high-technology company to mitigate risk
in its manufacturing environment includes geographical diversification of manufacturing
sites. This diversification needs to be more than multiple sites in a single area; the strategy
should look broadly enough at potential risk to expand the scope to locations that span multiple
continents. For many high-technology companies with a concentration of manufacturing capacity
in Asia, diversification must include examining other low-cost venues around the world.
In any review of low-cost manufacturing environments outside of Asia, Mexico should
be considered as a viable alternative. There are a variety of reasons that make Mexico an attractive
location for high-technology manufacturing: talent, educational infrastructure, preferred tax
structures, physical infrastructure, intellectual property, labor costs, free trade agreements (FTAs)
and exchange rate risk.
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