ASU, Mexico partner to boost production of semiconductors in North America

Arizona State University will be working with higher education institutions in Mexico, along with industry partners, to boost the production of semiconductors in North America, which has been identified as a crucial national security issue.

On Tuesday, ASU President Michael Crow signed a memorandum of understanding with Esteban Moctezuma Barragán, the Mexican ambassador to the U.S., to seal the partnership.

Earlier this year, President Biden signed the bipartisan CHIPS and Science Act, which will distribute $52 billion to accelerate U.S. semiconductor manufacturing.

Because it is not feasible for all semiconductor manufacturing to move into the U.S., the act includes $500 million for international cooperation. The ASU agreement will pave the way for an alliance of universities in the U.S. and Mexico, plus microelectronics manufacturers, to focus on training workers and building production capacity in the northwest border states. That shift will reduce U.S. reliance on Asian manufacturing.

Mexico is perfectly situated to partner with the U.S. on the initiative, which is crucial to the interests of all of North America, Moctezuma said during a talk at ASU on Monday.

“Semiconductors are the most essential input for a wide range of products — electronics, smartphones, computers, automobiles, the aerospace industry, information technologies, telecommunications infrastructure, medical devices, electromobility and household appliances,” he said, noting that the manufacturing process requires specialized technology and materials.

“Semiconductors make up 40% of the total cost of a new car today.”

He noted the rise of manufacturing in Asia, where 75% of all semiconductors are now produced.

“In 1990, the U.S. produced almost 40% of worldwide semiconductors, and now only 12%,” he said, while the U.S. and China account for 50% of the global demand for the product.

“Today, the industries and national securities of the United States depend on the supply of semiconductors produced in China, Japan, Taiwan and Korea. If this supply chain is broken, there will be a global economic crisis, as we experienced during the pandemic when China closed almost all economic activities.

“The industry faces a risk of shortage of semiconductors and human talent that could limit the pace of innovation in the coming years.”

Moctezuma said that Mexico is a key partner because it offers economic, social and political stability, fiscal incentives, low taxes, access to international airports and proximity to customers and supplies, plus qualified engineers and an available workforce.

“Remember that almost 40% of U.S. semiconductor plants are in border sites,” he said, noting that Intel and Texas Instruments already maintain facilities in Mexico.

“We need to continue working in this effort of bringing production back to North America. It is not just a matter of trade but of technology, education, competitiveness, innovation, workforce development, regional security and geopolitics,” he said.

“Let us own the reality that our geographic proximity means sharing challenges and sharing solutions, but most important, sharing our common future.”

The team from Mexico, which included university and state government officials, spent two days at ASU. They visited the ASU MacroTechnology Works facility in Tempe, a lab and fabrication space that is open to university researchers and community partners, and the Intel campus in Chandler. They also heard from Kyle Squires, dean of the Ira A. Fulton Schools of Engineering at ASU, and semiconductor industry representatives.

Sally Morton, executive vice president of Knowledge Enterprise at ASU, said that the agreement with Mexico is a natural outgrowth of ASU’s Charter.

“This is exactly the type of difficult but critical challenge our university charter calls upon us to address, and we’re excited to tackle it with you,” she said.

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