5377730933_64fd363fbd_b

Biden taps Mexico for chip investment alliance


As part of an effort to move supply of some crucial technological components from Asia to North America, President Joe Biden privately pushed his Mexican counterpart to establish new measures to benefit on the US campaign to bolster domestic semiconductor manufacture.

A deal with Mexico and Canada to better coordinate investment in semiconductor production across the continent has been put in place, and Biden’s advise was included. This included identifying chip investment prospects, vital mineral resources, and promoting advanced technology education.

On Monday in Mexico City, Biden met with Andres Manuel López Obrador. According to people with knowledge of the meeting, the two decided to form high-level teams to promote business collaboration on chips and other initiatives. They requested anonymity because the discussion was largely private.

Although the teams are still taking shape, US Commerce Secretary Gina Raimondo, who attended the meeting with AMLO, will play a significant role.

The North American Leaders summit, or more colloquially the “three amigos” summit, is a gathering where Biden will meet with AMLO and Justin Trudeau from Canada. The top priorities on the agenda are trade, economic cooperation, and migration.

“We’re in the process at home — and you are as well, we talked about it — of strengthening our supply chains, so that no one can arbitrarily hold us up or a pandemic in Asia can cause us to not have access to critical elements that we need to do everything from build automobiles to so many other things,” Biden told Trudeau in a recent meeting.

Trudeau stated his satisfaction with the Biden administration’s cooperation on the matter thus far and agreed that the nations must continue to move forward to establish those efficient and robust supply and value chains that we require.

After supply chain delays brought on by the Covid-19 epidemic and escalating tensions with China revealed the world’s reliance on Asian production, notably Taiwan, Washington has increased efforts to increase semiconductor output. This initiative involves a campaign to impede China’s plans to develop its own advanced semiconductor industry as well as more than $50 billion in incentives from a US law Biden signed last year to build new factories in the US.

During a visit to Mexico City in September, Raimondo, whose department is in charge of overseeing the implementation of chip spending, claimed that Mexico can profit from semiconductor manufacturing facilities as well as from testing, packaging, and chip assembly facilities. According to her, the CHIPS Act, which was passed by the US Congress last year, will open up employment chances for both the US and its southern neighbour.

A White House statement said that as part of the US, Canada, and Mexico’s attempts to coordinate investment in semiconductor manufacturing, a forum with representatives from the industry will be established to encourage the sector’s expansion.

The countries have also agreed to cut methane emissions, particularly those from the waste sector, by at least 15% by 2030.

López Obrador would seek Biden for assistance in Mexico City in order to attract semiconductor investment, according to a senior official in the Mexican Foreign Ministry.

According to the source, López Obrador’s administration wants the US to approach corporations wishing to migrate to North America jointly with the proposal that parts and procedures created in Mexico might be used in a new plant being built in a state like Arizona.

As part of an ambitious plan to construct three state-owned solar parks in the border state of Sonora, Mexico also wants US assistance in securing finance from development banks, according to the source, who wanted to remain anonymous since the plans were private. According to the source, López Obrador will also want to negotiate exporting clean energy from Mexico, particularly to California, north of the border.

Pan Finance is a print journal and news website providing worldwide intelligence on finance, economics and global commerce. Known for our in-depth analysis and opinion pieces from esteemed academics and celebrated professionals; our readership consists of senior decision makers from across the globe.

Contact us