President Joe Biden privately urged his Mexican counterpart to enact new policies to capitalize on the US drive to boost semiconductor production, part of a push to shift supply of some key technology components from Asia to North America.
The US message comes alongside an agreement unveiled Tuesday with Mexico and Canada to coordinate investment in semiconductor manufacturing across the continent, including identifying chip investment opportunities and critical mineral resources and supporting education in advanced technologies.
Biden met with Andres Manuel López Obrador on Monday in Mexico City, and the two agreed to set up high-level teams to spur economic cooperation on chips and other measures, officials familiar with the session said, speaking on condition of anonymity. The teams are still taking shape, but US Commerce Secretary Gina Raimondo, who participated in the meeting with AMLO, will be heavily involved, according to the officials.
Washington has ramped up efforts to expand semiconductor production after supply chain disruptions caused by the Covid-19 pandemic and rising tensions with China highlighted the global vulnerability to dependence on production in Asia, particularly Taiwan. That drive includes more than $50 billion in incentives from the CHIPS Act to build new facilities in the US, as well as a related push to stifle China’s ambitions to develop its own advanced chips industry.
Raimondo, whose department is leading the implementation of chips spending, said on a visit to Mexico City in September that Mexico can benefit both from the manufacturing facilities for semiconductors and also from testing, packaging and assembly of chips. The CHIPS Act, which the US Congress passed last year, will create jobs and opportunities for the US and its southern neighbor, she said.
Biden and López Obrador will meet Tuesday with Canadian Prime Minister Justin Trudeau for the North American Leaders’ Summit. The countries will announce that their efforts to coordinate investment in semiconductor manufacturing will include establishing a forum with industry representatives to support the growth of the semiconductor sector, according to a White House memo.
The nations are also committing to reduce methane emissions by at least 15% by 2030, specifically from the waste sector.
A senior Mexican Foreign Ministry official said last week that López Obrador would ask Biden in Mexico City for support attracting semiconductor investment.
López Obrador’s administration wants the US to jointly approach companies that are looking to relocate to North America with the suggestion that a new factory built in a state like Arizona could by supplied with some parts and processes developed in Mexico, the person said.
Mexico also wants US help to secure funding from development banks for an ambitious plan to build several state-owned solar parks in the border state of Sonora, said the official, who asked not to be identified while discussing plans that aren’t public. López Obrador will also look to discuss selling Mexican clean energy north of the border, especially in California, the person said.
–With assistance from Josh Wingrove, Max de Haldevang and Eric Martin.