-
- News
- Books
Featured Books
- smt007 Magazine
Latest Issues
Current IssueMoving Forward With Confidence
In this issue, we focus on sales and quoting, workforce training, new IPC leadership in the U.S. and Canada, the effects of tariffs, CFX standards, and much more—all designed to provide perspective as you move through the cloud bank of today's shifting economic market.
Intelligent Test and Inspection
Are you ready to explore the cutting-edge advancements shaping the electronics manufacturing industry? The May 2025 issue of SMT007 Magazine is packed with insights, innovations, and expert perspectives that you won’t want to miss.
Do You Have X-ray Vision?
Has X-ray’s time finally come in electronics manufacturing? Join us in this issue of SMT007 Magazine, where we answer this question and others to bring more efficiency to your bottom line.
- Articles
- Columns
Search Console
- Links
- Media kit
||| MENU - smt007 Magazine
Mexico: A New Hub for Electronics Manufacturing
September 25, 2018 | Doug Donahue, VP Business Development, Entrada GroupEstimated reading time: 9 minutes

Bright sunshine and stunning weather much of the year. A fast-paced way of life where young, well-educated, ultra-connected hipsters form an important part of a growing economy that drives innovation. A palpable buzz in the air, where it seems that youthful enthusiasm and a can-do mentality fueled by technology and entrepreneurialism come together, making anything possible. A who’s who list of important Fortune 500 companies and startups coexist: IBM, Intel, Oracle, Flextronics, Wizeline, TTech, HP and Tata, to name just a few.
You might get the impression you’re in Silicon Valley but, in this case, you’re actually some 3,000 km away, in the heart of Mexico’s Silicon Valley in Guadalajara, Jalisco state. You’ll find many of the trappings here that you would find in Mountain View, San Jose or San Francisco in this greater metropolitan region of over 5 million people, which is Mexico’s second-most-populous area behind Mexico City. While Guadalajara’s reputation is increasingly well known as a diverse, thriving tech city, what’s less commonly understood is that the area is just one of many in Mexico where a young educated workforce, technology and an optimistic spirit are merging to drive economic growth and opportunity, particularly in the electronics manufacturing services (EMS) sector.
Such hubs are found across Mexico in areas as diverse as Monterrey, Aguascalientes, Tijuana, Querétaro and San Luis Potosi. How did this happen? How did regions of the country known for manufacturing or agriculture transform into thriving urban centers of learning, innovation and possibility? To answer that question, we must first explore the recent past, because you cannot understand Mexico’s current strength in EMS, including contract electronics manufacturing, without first understanding its competitive relationship with China.
Mexico’s Transition to Technology and Electronics
Starting in the late 1980s and early 1990s, Mexico underwent a significant economic restructuring. With once major state-owned companies now privatized, Mexico went from being a closed economy to an export-oriented industrial one. The result of this transformation was a steady increase in trade between Mexico and the United States. By 2000, the U.S. accounted for nearly 80% of all Mexican trade—up from 69% in 1990, according to Forbes.
It also was around the turn of the 21st century that China began positioning itself as a cost-competitive alternative to Mexico. In response to this move, Mexico began to transform yet again, this time by shifting focus away from assembly and toward manufacturing more value-oriented products, such as those found in the electronics sector.
Today, electronics manufacturing overall is one of Mexico’s fastest-growing industrial areas. According to Forbes, between 2002 and 2012, Mexico’s electronics exports increased by 73%, from $43.3 billion to $74.9 billion. As of 2015, the manufacturing value-added sector, which electronics is part of, accounted for 18% of Mexico’s GDP. That same year, electronics exports surpassed $80 billion. The main destination for these exports was the U.S., with an 86% share, followed by Canada, China, France, the Netherlands and Germany. Computers account for the largest share in exports, followed by flat screen TVs and mobile phones.
Most recently, a significant hub of electronics and contract manufacturers has sprung up in Mexico, with experts pegging the number of manufacturing plants dedicated to the electronics sector at more than 700. Electronics manufacturing is thriving in Mexico’s north-central region—known as “The Bajio,” and is comprised of parts of the states of Aguascalientes, Jalisco, Guanajuato, Querétaro and San Luis Potosi—which is lined with state-of-the-art facilities bearing the logos of such leading international electronics OEMs as Samsung, LG, Toshiba, Foxconn, Flextronics and Intel, among others. With the global electronics OEMs now firmly established in Mexico, the rest of the supply chain has quickly followed, attracting new investors, generating jobs and solidifying the region’s reputation as Mexico’s answer to Silicon Valley.
The World’s Lowest Business Costs
In a competitive global market, finding ways to manage ever-rising costs is essential to corporate success. Here, Mexico brings many advantages. According to KPMG’s Competitive Alternatives 2016 report, Mexico has the world’s lowest business costs. Compared to the U.S., Mexico offers an 11.9% savings on the costs of manufacturing electronics equipment and components. KPMG also reports that Mexico enjoys the lowest component production costs within the industry—as much as 18.2% lower than other leading electronics manufacturing countries like Canada, the Netherlands, UK, France, Germany and Japan. It also boasts the lowest operating costs in the Americas for the manufacturing of electronics components and equipment.
As a result of these cost advantages, as of 2016, Mexico ranked as the world’s sixth-largest producer of electronics and the third-largest producer of computers. Exporting more than $70 billion in technology products to the U.S. every year, Mexico is the second-largest supplier of electronics products to the U.S. market (behind only China).
Cost-Competitive Talent
With cost advantages like these, it is little wonder that we are now witnessing a global shift of manufacturing to Mexico. Yet Mexico’s attractiveness extends beyond cost-competitive production, as it comes backed by an available pool of talent, particularly young talent.
“While our customers demand cost efficiency and you simply can’t find better cost savings than what Mexico offers, we also moved for talent,” says Firstronic Vice President of Operations, Steve Fraser. Firstronic, a Michigan-based electronics contract manufacturer, has global production in eight locations, including Juarez, Mexico. “Mexico has good technical staff and more and more people are getting tech degrees every year,” Fraser added.
According to Forbes, as Chinese wages continue to rise, Mexico’s cost advantage further strengthens. Mexico’s labor costs are now almost 20% lower than China (whereas in 2000 they were 58% higher). At the same time, electronics companies aren’t coming to Mexico for cheap labor, they’re coming for cost-competitive talent.
Over the past decade, Mexico’s population has become increasingly educated, with a growing number completing advanced academic degrees. According to the National Association of Universities and Institutions of Higher Education, in 2012, Mexican universities graduated 101,700 engineering and technology students. Today, KPMG places that number closer to 114,000 annually. In other words, Mexico graduates 18% more students in the manufacturing, engineering and construction fields per capita than the U.S. does.
Page 1 of 2
Suggested Items
STI Electronics Celebrates Frank Honyotski’s 25 Years of Service
06/02/2025 | STI ElectronicsSTI Electronics, Inc., a full-service organization providing training services, training materials, analytical/failure analysis, prototyping, and contract PCB manufacturing, proudly announces the 25th work anniversary of Frank Honyotski, Master Instructor.
Axxon-Mycronic Showcases Precision Protection Technologies for Extreme Environments at Space Tech Expo
06/02/2025 | Axxon-MycronicAxxon-Mycronic, a leading, global supplier of innovative and production-ready, dispensing and conformal coating systems, is pleased to announce its participation at the Space Tech Expo USA 2025, taking place June 3-4, 2025 at the Long Beach Convention Center in Long Beach, California. Axxon-Mycronic will be exhibiting in Booth #552.
Living His Dream: IPC EAO Course Leads Thejas K to Role as Quality Engineer
05/30/2025 | Michelle Te, IPC CommunityIt’s not often that a child wants to follow in the footsteps of their parents’ career. But Thejas K, a 22-year-old from Mysuru, India, whose mother Padmavathi was an EMS operator for nearly 20 years, is now an associate engineer in the quality department at Cyient DLM where PCB assemblies are manufactured for aerospace and defense.
GTSMT SMT Production Lines are Transforming Modern Electronics Manufacturing
05/29/2025 | EINPresswire.comGTSMT, a prominent leader in the Surface-Mount Technology (SMT) sector, announced the introduction of cutting-edge innovations designed to tackle the evolving challenges facing the global electronics manufacturing industry.
IPC Applauds Leadership of Reps. Moore and Krishnamoorthi on PCB Manufacturing Bill
05/28/2025 | IPCIPC, the global electronics association serving more than 1,400 U.S. companies and over 3,200 worldwide, strongly supports the bipartisan reintroduction on May 28 of the Protecting Circuit Boards and Substrates (PCBS) Act in the 119th Congress.