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Grow, Pause, Grow: A Report From SMTA Guadalajara
September 12, 2024 | Nolan Johnson, PCB007Estimated reading time: 1 minute
Two years ago, the EMS industry in Mexico—spurred by the EV and medical markets, and accelerated by changing trade relations with China—was growing by leaps and bounds. In fact, recently, SMT007 Magazine reported on the near-shoring effects. This week’s SMTA Guadalajara Expo and Tech Forum reflects that growth through the show’s rapid expansion and high-energy enthusiasm.
There is a definite bustle here, despite first-hand reports from many EMS providers of a drop in revenues compared to the peaks in 2022 and 2023. This drop in sales, along with the glut in factory capacity which follows, is not a dark foreboding, however. The dynamic I hear described is that OEMs, seeing a pause in demand for their products, are pausing (not canceling) their EMS work. In turn, the EMS companies, faced with a pause in orders, have paused some of their capacity build-out.
Long-term investment, it appears, is still under way in the region. Multiple equipment suppliers are investing in local staff and support infrastructure to better support their Mexican customers. Meanwhile the business in South America continues to expand and to invest.
Judging from what I’m picking up on the show floor, this pause in the Mexican market is being used to take a breath, optimize existing capabilities across the supply chain, and get ready for the return of the growth phase.
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