By Francisco Yeh, International Affairs Department of TEEMA
TEEMA held an online meeting with the Taiwanese Association of El Paso / Juarez on 18th, March 2022, during the meeting, representatives discussed issues such as the candidate of TEEMA’s advisor, experiences regarding the deployment on the US-Mexico border, and TEEMA ‘s Delegation to Attend the 2022 SelectUSA, etc.
The attendees include Ricardo M.S. Hsu Director of Economic Division, Taipei Economic and Cultural Office in Mexico, Alex Liao Chairman, Taiwanese Association of El Paso / Juarez; John Hsu, General Manager of Pegatron Mexico; Arch Chen General Manager of Inventec Mexico; Edward Lin, Executive Director of Wistron Mexico, etc.
Taiwanese companies which invest in Mexico observed that the construction of a factory in Juarez City, Mexico is in full swing. Many companies from China have set up factories for household appliances and automotive parts in Monterrey. At the moment, the majority of Taiwanese companies are concentrated in Juarez City in Mexico. It is suggested that Taiwanese supply chain partners enter the market as soon as possible, otherwise, China suppl iers will occupy this region in two or three years.
During the meeting, some companies express that although many local automation equipment and machines are imported from Asia, the quality of local suppliers in Mexico is actually not bad but more expensive, it is hoped that the US-Mexico delegation organized by the TEEMA in June can help introduce the back-end supply chain, upstream suppliers, and downstream component suppliers in Taiwan, a move considered beneficial to the formation of Taiwan's industrial clusters.
Taiwanese companies all agreed that the supply chain in China is rather complete, and quotations can be obtained in a short period of time, while Mexico takes a long time and lacks a back-end supply chain. Also, the cost of local repair in Mexico is too high. If Taiwan's medium-sized automation equipment is willing to invest in Mexico, it will enjoy huge business opportunities. Juarez City is developing rapidly.
Companies from China and US have entered this market one after another. However, the latter part of the supply chain from Taiwan has not been established, which will reduce competitiveness.
Although Mexico enjoys the advantage of having a wide land, there is no land for sale near the USMexico border, and there is also a shortage of water. Local companies in Mexico suggest that TEEMA, the Taiwan government, and the Mexican government negotiate to discuss the possibility of setting up an industrial park to solve the
problem of water and electricity. In addition, it is very crucial to improve the government's investment environment. The attitude of the Mexican government is very critical. However, due to the lack of infrastructures, small and medium-sized enterpr ises encounter great investment obstacles, and large factories also face many challenges.
TEEMA plays an important role as the voice of Taiwan's ICT industry and collects issues of common concern in the industry, if the COVID-19 situation is properly controlled in late June, TEEMA will organize a US-Mexico delegation and attend to 2022 SelectUSA Investment Summit in late June, to assist the members to explore business opportunities in the post-pandemic era, strengthen supply chain cooperation and enhance industrial competitiveness. This delegation will arrange to inspect the local investment environment, trade situation, and visit local enterprises and factories.
Currently, it is tentatively scheduled to visit California, Chihuahua, Mexico, El Paso, Texas and Maryland.
Overview of Taiwanese Manufacturers Investing in Mexico
According to the Mexican Ministry of Economy, there are 295 Taiwanese companies investing in Mexico, with a total investment of US$1.135 billion from 1999 to 2021. More than 300 Taiwanese companies have invested in Mexico. Major Taiwanese companies include Foxconn, Inventec, Wistron, Pegatron, ASUS, Mytek, Gigabyte, Pochen, Delta, NienHsing, Tex Ray, TECO, USI, TPV, Arima, Lite-On, Macauto Industrial, Sixxon Tech, etc. According to the statistic from Investment Board, Ministry of Economic Affairs, as of July 2021, Taiwan has made 44 investments in Mexico, with a cumulative investment amount of US$426 million.
