20 Negocios20 Negocios Photos archive

Mexico is an important electric and electronic device producer. The country manufactures high-demand products worldwide, including cell phones, video game gadgets, computers and televisions. Numbers speak for themselves: over 730 manufacturing plants related to the electronic industry, 709 companies dedicated to the electric industry and 197 electric-appliance companies; thousands of jobs across the country and millions of dollars in exports and Foreign Direct Investment (FDI).

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Electronics is one of the fastest growing industries in Mexico in terms of export potential and employment generation. Cur-rently, Mexico is the second larg-

est supplier of electronic products to the US market, which comprises audio and video, telecommunications, computer equipment and its parts.

There are over 730 manufacturing plants related to the electronic industry in Mexico, located mainly in the northern region, in the states of Baja California, Chihuahua and Tamaulipas. Eight out of the 10 world’s largest manufacturing service suppliers operate in

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Mexico, including firms such as Flextronics, Jabil Circuit, Celestica and Sanmina SCI.

Between 2003 and 2009, Mexican elec-tronic industry exports registered an average annual growth of 17.1%. In 2009, the sector’s exports, which added up to 59.6 billion usd, represented 30% of Mexican non-petroleum exports and the industry’s production ammo-unts to approximately 6.7% of the country’s GDP. In 2010, the sector exported 71.4 billion usd, 20% more than the previous year.

The US is the most important market for electronic products manufactured in Mexico. It operates 83% of the sector’s exports, followed by Canada with 6%. Other important destinations for electronic products manufactured in Mexico are the Netherlands, Colombia and Finland.

Mexico’s electronic industry is all about technology. The manufacture of computer components and products is a widespread activity of the sector in the country. Com-panies producing items such as modular circuits for telephony equipment, process-ing units, computer equipment, telephone switching apparatus or laptop computers, have been operating in Mexico since the 1970s. These businesses are now present in several Mexican cities, generating jobs, at-tracting new investments and fostering the development of the sector’s production and supply chains.

Over the past decade, the industry has made significant progress and products now include everything from systems that can be used for brain-scanning as well as 3D anima-tion, or for financial system planning and multinational corporations’ strategic work.

Guadalajara is probably one of the pre-ferred destinations for transnational compa-nies that manufacture electronic products. Firms like Burroughs and Motorola were the first to discover and make the most of the city’s advantages. In the 1970s, both compa-nies established maquiladora plants, giving birth to what 20 years later would become the Mexican Silicon Valley.

Today, the Guadalajara cluster –with com-panies such as IBM, Flextronics, Sanmina, Jabil, Intel and some of the world’s software giants– offers clear advantages when com-pared with other development nodes in Mex-ico and Latin America.

Other regions, such as Estado de México, have kept their focus on mobile telephony

with the presence of companies such as Erics-son and Pantech.

Currently, Mexico is the third largest ex-porter of cell phones. In 2009, exports of mobile phones manufactured in the country reached 9.84 billion usd.

suCCEss IN fuLL hdTV manufacturing industry has become a high-tech cluster within the electronic indus-try scene in Mexico. The market for new tech-nology TV screens has grown rapidly in the last years, in order to meet the US’ demand. Today, the production of high-tech TV screens

has displaced that of Cathode Ray Tube (CRT) televisions and has reached up to 91% of the total annual production of TV manufacturers in Mexico.

Flat screen TVs represent around 25% of Mexican electronic industry annual exports. In 2009, Mexico was ranked the largest ex-porter of flat screen TVs in the world, above countries like China, Germany and the US, reaching 15.6 billion usd –which represented 26.3% of the sector’s total exports that year. In 2010, the total value of flat screen TV ex-ports was 17.4 billion usd, 12% growth com-pared to 2009.

22 Negocios Photos archive

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Thus, this is the cluster generating the high-est manufacturing output in Mexico. Most of the manufacturers of these products are located along the Mexico-US border. The large expanse of these manufacturing plants convert many of companies in veritable industrial parks, as their premises include services such as clinics, child nurseries, canteens and sports facilities.

A map generated by the Ministry of Economy, marking the location of the most representative industries, shows that around 61% of the audio and video electronic industries are located in Baja California. Companies such as Samsung, Sony, Sanyo, JVC and Pioneer have established opera-tions in the Tijuana and Mexicali cluster, which generates the highest manufacturing output of flat screen TVs and audio and video systems. Af-ter the Baja cluster, Ciudad Juárez, Chihuahua, is the second largest producer of TV screens in Mexico. In that border city operate 26% of the TV and audio and video systems manufacturing companies established in Mexico.

fROm mExICO TO yOuR hOmEMexico is at the forefront of the production of domestic electric appliances which are rec-ognized for their quality and sold around the world.

Products made in Mexico include micro-wave ovens, coffee makers, juice extractors, dishwashers, air conditioning vacuum clean-ers, plasma televisions, blenders, refrigera-tors, mixers, washers, dryers and irons.

Mexico is the second largest exporter of refrigerators and freezers with a separate ex-terior door, vacuum cleaners with a 1,500 W power and electric water heaters.

In 2010 this sector grew 11.37%. Expected growth for 2011 is 5.4% and, according to experts, the Mexican electric industry could grow at a 4% annual rate during the following seven years.

There are 709 companies dedicated to the electric industry and 197 electric-appliance companies in the country. There are a total of 78 white goods manufacturing plants in Mex-

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ico, all well distributed among the states. The industry generates about 35,000 direct jobs and 110,000 indirect jobs.

Such has been the proliferation of white goods manufacturing in Mexico that if we were to look into homes in the US and Can-ada, we would find that most of its electrical appliances –washer, dryer, range, refrigerator, vacuum cleaner and microwave oven– were made in Mexico.

In 2009, Mexico’s exports in this sector reached 16.55 billion usd, while the period be-tween January and October 2010, added 17.8 billion usd, having the US and Canada as the main markets, followed by Colombia, Venezu-ela and Saudi Arabia.

International firms like Electrolux, ABB, Areva, Mitsubishi Electric, Condumex, GE and Delphi, among others, are established in Mexico.

For most companies, North America repre-sents an attractive share of the domestic elec-

trical appliance market. For example, Mexico, the US and Canada represent 27% of over 47.4 billion products that LG sold in 2007. The com-pany’s three plants in Mexico supply 90% of LG products sold in Mexico and 80% of those sold in the US. LG also manufactures for Latin America, which represents 10% of the compa-ny’s total sales worldwide.

hOmE TO TEChNOLOGyBetween 2000 and 2010, FDI in the electronic sector registered a total of 20.55 billion usd, concentrating on the production of informat-ics process equipments and spare parts for communication devices. In 2010, FDI totaled 1.3 billion usd.

Meanwhile, FDI in the electric industry to-taled 8.65 billion usd between 2000 and 2010. FDI focused on electric accessories and mate-rials, as well as in electric-appliance produc-tion and assembly. During 2010, FDI in this industry reached a total of 360 million usd.

So why Mexico? Without a doubt, proxim-ity to the world’s largest market for electronic and electric devices explains exports and FDI growth rates in that sector.

Also, manufacturers are unanimous when they say that Mexico’s skilled workforce, strate-gic location, large suppliers and supply chains and logistics are the main reasons for locating in the country.

Mexico is the country with the lowest in-dustry component manufacturing costs, being 18.2% above other countries such as Canada, the Netherlands, the UK, France, Germany and Japan, according to Alix Partner’s Outsourcing-Manufacturing Cost Index 2010 and to KPMG’s Competitive Alternatives 2010 report.

Because of this and due to Mexico’s young growing talent –each year, 114,000 students of engineering and technology-related fields, graduate from Mexican universities– electric and electronic industries have had an impor-tant development in the country. n

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BAJA CALIFORNIA

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MAJOR FIRMS

The Geography of the

Electronic Industryin Mexico

BAJA CALIFORNIA

SONORASONORA

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ESTADO DE

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Universal ScientificMotorola

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MAJOR FIRMS

The Geography of the

Electronic Industryin Mexico

BAJA CALIFORNIA

SONORASONORA

CHIHUAHUA

QUERÉTARO

MORELOS

ESTADO DE

MÉXICO

AGUASCALIENTES

White WestinghouseXeroxSiemensFlextronicsVolexTexas Instruments

CHIHUAHUA

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COAHUILA

AGUASCALIENTES

JALISCO

SONORA

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QUERÉTARO

ClarionSiemens

COAHUILA

ThomsonMORELOS

NEC

JALISCO

IBMHP

HitachiNEC

Lucent TechnologiesKodak

SiemensMTI Electronics

SolectronFlextronics

Jabil CircuitSCI Sanmina

ECMMBenchmarkTechnicolor

Universal ScientificMotorola

Cumex

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NUEVO LEÓN

PioneerKodak

SCI – SanminaCelestica

ElcoteqAFL

Nippon DensoAxa Yazaki

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TAMAULIPAS

Maytag Mexico Appliance Products

Tutco de México

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Industrias Rheem

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Kimco

Wiegand

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BSH Electrodomésticos

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Industrias Man de México

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Honeywell Manufacturas

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LG Electronic Monterrey

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Industrias Acros Whirlpool

Carrier México

Oasis Latinoamérica

Panasonic Home Appliances

York Aire

Starion México

Criotec

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LG Electronics México

Calentadores Magamex

Koblenz Eléctrica

Gillete de México (Braun)

Industrias Técnicas Mexicanas (Lenisco)

Philips Mexicana

Sunbeam Mexicana(Sunbeam, Osterizer, Oster and Mr. Coffee)

Turmix de México

Appleton Electric

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WC Wood

Grupo Industrial Saltillo (Calorex, Cinsa)

Hamilton Beach Proctor Silex

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Aparatos Eléctricos Acuña

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inFograPhic oLdemar

COvER fEaTuREeLecTRoNicSiNDUSTRY

TAMAULIPAS

Maytag Mexico Appliance Products

Tutco de México

Black & Decker de Reynosa

Grupo Marshall

Industrias Rheem

Sunbeam Oster

Matamoros

Kimco

Wiegand

MEXICO CITY

BSH Electrodomésticos

Hamilton Beach/Proctor–Silex de México

Industrias Man de México

Timco

Kim Teck

Nulec Industrias

Home Appliancesfrom Mexico to Your Home

CHIHUAHUA

Electrolux de México

Electrolux Home-Products

Juver Industrial

Digital Appliance Controls

Dometic MX

Honeywell Manufacturas

IMW de México

Jabil Circuit de Chihuahua

Plexus Electrónica

NUEVO LEÓN

LG Electronic Monterrey

Mabe

Industrias Acros Whirlpool

Carrier México

Oasis Latinoamérica

Panasonic Home Appliances

York Aire

Starion México

Criotec

ESTADO DE MÉXICO

LG Electronics México

Calentadores Magamex

Koblenz Eléctrica

Gillete de México (Braun)

Industrias Técnicas Mexicanas (Lenisco)

Philips Mexicana

Sunbeam Mexicana(Sunbeam, Osterizer, Oster and Mr. Coffee)

Turmix de México

Appleton Electric

COAHUILA

WC Wood

Grupo Industrial Saltillo (Calorex, Cinsa)

Hamilton Beach Proctor Silex

Sunbeam Oster de Acuña

Aparatos Eléctricos Acuña

QUERÉTARO

Daewoo Electronics

Mabe

Samsung Electronics México

Applica Manufacturing

Servilamina Summit Mexicana

GUANAJUATO

Industrias Acros Whirlpool

Mabe (T-Fal, Krups, Moulinex, Romenta)

GSEB Mexicana

Vistar

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Taurus Mexicana

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Industrias Acros Whirlpool

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