The electronics industry in Mexico consists of more than 700 manufacturing companies, with close to 307,000 people employed. This represents 8 percent of total employment within the manufacturing sector.

      During 2006, this sector received $950 million of direct investment, and exports from the electronics industry were 26.8 percent of total Mexican exports in the manufacturing sector.

      This industry is located mainly in the states of Aguascalientes, Baja California, Chihuahua, Coahuila, Estado de México, Jalisco, Nuevo León, Querétaro, and Tamaulipas.

      The border zone has a large concentration of the maquiladora industry; the northwest focuses on audio, video (TVs and monitors), telecom and automotive electronics. The northeast is focused on the automotive electronics, computing, telecom, and home appliances. At the center zone, home appliances and consumer electronics are produced.

      Mexico’s electronic industry continues to evolve, due in part to the growing competition from Asian countries. The growth of electronic components has been driven by a switch to new product lines including the aerospace, automotive, network equipment, game consoles, printers, high capacity servers, storage media, and consumer electronics industries, which continue to be the largest user of electronic components.

      In 2006, about 32 percent of all electronic components imported to Mexico were from the United States, representing a 3.73 percent increase from the previous year. Nevertheless, China continues to gain market share and had an increase of 58 percent, while Japan and Korea had increases of 11 percent and 75 percent respectively. However, there are competitive advantages for Mexican electronic firms to import components from U.S. suppliers under NAFTA, including short lead times in transportation, virtually 100 percent duty-free electronic components, and streamlined customs procedures.

      In recent years, Mexico’s exports of electronic products have considerably increased by almost 20 percent. In 2006, electronics exports reached $54.7 billion, almost a 19.3 percent increase from 2005. The main manufacturing sub-sectors continued to be information technologies (33 percent) and audio and video (30 percent).

      Mexico has two main centers for the electronic industry: Tijuana, B.C. and Guadalajara, Jal.

      Baja California is the Mexican border state with the greatest number of electronics plants employing approximately 91,000 people. According to Baja California’s Economic Development Office, in 2006, maquiladoras in the state produced 18 million television sets and computer monitors. The seven largest electronic maquiladoras are Hitachi, JVC, Matsushita, Sanyo, Samsung, Sony, and Sharp. While some of these plants continue to produce conventional television and computer monitor sets, they switched to the manufacture of the latest technologies including flat screen sets: Liquid Crystal Diode (LCD), Digital Light Processing (DLP) and plasma. Nevertheless, conventional televisions still make up approximately 15 percent of all production and destined for the Latin American, African and Asian markets. Most of these companies have the same requirements for suppliers: 9000 ISO certification, Just-In-Time delivery, production capacity and competitive prices.

      The Western Region (Jalisco) is focused on the production of high-tech electronics, telecom, and IT & electronics subassemblies. In 2006, Jalisco’s electronics industry consisted of 12 OEM’s, 13 CEM’s/EMS, 30 design centers, 150 software companies, and more than 300 specialized suppliers. Some of the international OEMs located here are IBM, Hitachi, BDT, Kodak, Technicolor, Intel, and HP. CEMs/EMS include, among others: Flextronics, Yamaver, VOGT, Jabil, Mexikor, Sanmina-SCI, and Benchmark.

      The international design centers located in Jalisco, specifically in Guadalajara, include: Global Vantage, Solectron, Intel GDC, and A2E. They are focused on mechanical aerospace, design and embedded software, IC’s design, electronics applications, etc. There are also 21 local design centers, such as CTS/CINVESTAV, Arteche, Pegasus Control, Resser, Mixbaal, working on IC’s & electronic design, IC’s, PCB’s design, electronic equipment, testing equipment design, measurement equipment (Electronic & mechanical design), etc.

      Electronics exports represent a big part of exports from the state. Electronics industry exports went from $10,500 million in 2005, to $11,933 million in 2006, and it is expected to grow to $13,806 in 2007.

      The electronics industry did not meet the investment goal of $300 million during 2007. However, there is confidence that investment will increase in 2008.

      The electronics industry in Jalisco registered $283.4 million in investment during 2007. Industry analysts predict that the following segments will grow as follows in 2008:

      •Manufacturing sector 5 percent in exports.

      •Design and services 100 percent.

      •Software 30 percent.

      Within the electronics industry, the software production and distribution segment employs 6,500 in Jalisco.

      Main products manufactured in Jalisco include docking stations, PCs, printers, paper handling solutions; IP phones, mobile phones, telecom servers, TV internet access boxes, set top boxes; ABS, air bag systems, car immobilizers, car security systems, clusters; telemetric equipment, tomographs; routers & firewalls, storage systems, sliders; measurement & telemetric equipment, control systems; alarms, sensors, cameras, handhelds and juke boxes.

      The major components and parts imported by the electronics manufacturing industry under HTS 85 during 2006 were digital monolithic integrated circuits; parts/antenna for transmission for radio and television; monolithic integrated circuits, other than digital; printed circuits, cathode-ray, television picture tubes for color monitors; electrical apparatus; hybrid integrated circuits; insulated electric conductors; diodes ex photosensitive or light-emitting diodes; electrical inductors; electrical conductors; indicator panels incorporating LCD’s and cards electrically integrated.

      As Mexican manufacturing of electronic products becomes more complex, U.S. companies can find opportunities in new sectors such as batteries, antennas and switches, relays and plugs. Also, U.S suppliers of services related to electronic components such as logistics, scrap management, inventory management, etc., can find opportunities in the Mexican market.

Audiovisual market

      The Mexican market for audiovisual products and services is in a strong growth phase. The convergence of ICT and AV technologies is stimulating the demand in the Mexican market for the latest innovations in the consumer and professional end-user segments. U.S. companies in the AV industry have a good market presence and opportunities exist for companies with quality innovative products.

      For 2007, it is expected that the Mexican market in the ICT sector will generate more than $38 million, an increase of 10.9 percent from 2006. Although there are no available statistics on the AV industry in Mexico, evidence reveals that the market for AV products and services has experienced good growth in recent years. Technological developments being adopted in the market include: conference equipment, plasma screens, home cinema systems, wireless applications, sound & acoustics appliances, streaming media, boards, screens & projectors. The markets in which AV systems have shown a growth in the last years are: education, government, healthcare, retail and entertainment (museums).

      The audiovisual industry has evolved in the last years to include not only audio and video systems, but also integrating communications technologies in order to comply with the market demands.

      The most popular AV products in the corporate, entertainment and education sectors include audio systems (microphones, speakers, amplifiers), projectors, screens and whiteboards.

      The leading markets for AudioVisual technology are education, corporate and entertainment sectors. In an effort to enhance the education system in Mexico, the federal government launched the Enciclomedia system in 2002, which has as its main objective delivering e-content to more than 22,000 5th and 6th grade classrooms in public schools. For this project, the government acquired more than 30,000 interactive whiteboards.

      Educational institutions and universities that have different campuses around the country also invest in the latest AV technology, such as videoconference equipment, as this technology facilitates their internal communications. Also, some schools offer continuous education programs via videoconference.

      In corporate and government sectors, video conferencing equipment is a segment with good potential in Mexico, as well as display technology such as plasma screens; as large and medium size companies are replacing their old monitors and systems with the new technologies of LCD or DLP displays.

      The demand in the audio & sound systems (amplifiers, microphones) technology is also high, as seminars/conventions and entertainment events (concerts, performing arts, theme parks) are an important segment of the industry in Mexico.

      The main competitors for U.S. AV technology are manufactures from Asia (Japan, Korea, China & Taiwan) as well as some European countries (Germany & Italy). All major international brands have local distributors, who give technical support to end-users.

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