US and Mexico Collaborate on Chipmaker Incentives

The U.S. and Mexico are deepening their partnership on semiconductor supply chains, a collaboration formalized under the International Technology Security and Innovation (ITSI) Fund. This fund was created by the CHIPS Act of 2022, which allocated $500 million to foster semiconductor security and diversification with international allies. The initial phase of this partnership involves a thorough assessment of Mexico's current semiconductor ecosystem, including its regulatory framework, workforce, and infrastructure. This analysis will be conducted with key Mexican stakeholders, such as state governments, universities, and research centers, in conjunction with Mexico's Secretariat of Economy. This collaboration builds upon existing frameworks like the bilateral High-Level Economic Dialogue (HLED) and the North American Leaders Summit. U.S. Secretary of Commerce Gina Raimondo has emphasized that while the CHIPS Act will boost the U.S. industry, it also presents significant opportunities for Mexico to contribute to a robust North American semiconductor ecosystem. Mexico's role is seen as a crucial alternative to China for semiconductor production, focusing on assembly, testing, and packaging (ATP). The country's proximity to the U.S. and its established manufacturing expertise in sectors like automotive and electronics make it an attractive partner for nearshoring initiatives. Several Mexican states, including Jalisco, Baja California, Sonora, Aguascalientes, and Querétaro, have been identified as prime locations for new semiconductor manufacturing plants due to their infrastructure and skilled labor. Global companies like Intel and Skyworks already have a presence in Mexico, conducting research, development, design, and manufacturing. Workforce development is a key component of the collaboration, with initiatives like Arizona State University's "English for the Semiconductor Industry" course being offered to Mexican professionals. This program aims to align educational curricula with the specific needs of the semiconductor industry. The ultimate goal is to create a more resilient and secure global semiconductor value chain by integrating Mexico more deeply into North American production. This strategic move aims to reduce reliance on Asian markets and mitigate risks from geopolitical tensions and supply chain disruptions. In June 2025, leaders from the public and private sectors of both countries convened at the U.S.-Mexico Semiconductor Collaboration Forum in Phoenix, Arizona, to further these goals. This event focused on strengthening cooperation between state and local ecosystems, promoting investment, and ensuring supply chain resilience.