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 user 2005-02-22 at 10:49:00 am Views: 45
  • #10447

    Investors Bet on Silicon
    Border in Mexico

    MEXICALI, Mexico – On
    an empty stretch of Mexican desert where nobody but cowboys now roam, developers
    see a new, $1 billion high-tech industrial park dubbed the “Silicon Border.”

    California-based developers hope the
    chip manufacturing and assembly complex, located just south of the U.S. border,
    will become a new hub of the North American semiconductor industry and take
    advantage of Mexico’s cheaper labor costs.
    The 15 square mile patch outside Mexicali is relatively
    close to the corporate headquarters of U.S. high- tech companies and will
    compete with China and Taiwan in the $200 billion global semiconductor industry.

    “The project aims to capture some of
    the new capacity in the semiconductor industry,” said Ron Jones, the president
    and chief executive of Silicon Border Development, the California- based
    developers behind the project.

    “More and more of it is going to Asia and we believe it
    is prudent to have a parallel supply chain in North America,” he told Reuters in
    a telephone interview.
    Mexico has had problems attracting high-tech companies
    due to relatively low education levels, plus energy and labor costs that are
    often much higher than Asia’s. Elsewhere, large-scale semiconductor projects
    such as Dubai’s “Silicon Oasis” have disappointed in the past
    Still, Mexican authorities have pledged 10-year tax
    breaks to hi-tech companies locating to the site, which is just a two hour drive
    from San Diego, in an area with abundant water, power and gas supplies.


    Jones said the science park aims to woo a variety of hi-
    tech businesses, including semiconductor and flat panel display makers, as well
    as contract chip manufacturers known as foundry plants.

    It wants to create 100,000 jobs for Mexican workers and
    U.S. commuters slipping over the border each day.

    The group is negotiating financing of between $100
    million to $125 million to break ground on the first stage of the five- step
    project as soon as August of this year.
    Business leaders in Mexicali, which has 600,000
    residents and three universities, have embraced the project, which they say will
    add value to the traditional export assembly plant or “maquiladora” model.

    “They are looking for engineers and designers … and
    not just intensive labor … so it would bring real economic benefit to
    Mexicali,” Federico Prieto, the president of the Mexicali Economic Development
    Advisory Council .

    Industry analysts are also hopeful.

    “There is a danger that we could lose a lot of our design and
    research activities to be closer to the manufacturers in China and Taiwan,” said
    industry analyst Risto Puhakka of VLSI Research. “In terms of North American
    competitiveness … we’d be delighted to have it succeed.”