Electronics manufacturing mexico attractive

MacroFab Blog

What Makes Electronics Manufacturing in Mexico so Attractive?

By Muirae Kenney  |  February 28, 2023

Mexico graduates an average of 115,000 - 130,000 technicians and engineers annually, making them an ideal source of skilled labor.

Checkpoint mexico technicians

Nearshoring to Mexico is an ideal choice for most North-American companies that need volume PCBA manufacturing; in this post, we’ll dive into why you should consider Mexico for your electronics manufacturing needs.

One of the many questions companies must answer is where they’ll have their PCBA products manufactured. It’s essential to choose a manufacturer that’s both inexpensive and qualified. Additionally, decision-makers should consider regions that can help them minimize their legal risks.

Mexico Labor Rates

High production costs lead to higher end-user costs and lower profits. Finding an affordable manufacturer is an essential factor in building a competitive product that sells well to your end user.

Mexico labor rates

In the United States, the federal minimum wage is $7.25 per hour, and in many states, it’s as high as $15. But the cost of living in Mexico is lower than in the United States. As such, labor costs in Mexico are lower as well. Wages average around $8.72 per day in most areas of Mexico and $13.13 per day in the Mexico Free Zone near the northern border.

Mexico’s Skilled Labor Advantages

Mexico skilled labor advantage

As the demand for Mexico-based manufacturing operations increases, so does the incentive for Mexico’s federal government and state governments to invest in personnel training.

Mexico graduates an average of 115,000 - 130,000 technicians and engineers annually, making them an ideal source of skilled labor. Electronics companies specializing in printed circuit board assembly (PCBA) and other highly technical manufacturing can easily find qualified workers in Mexico.

Further, Mexico’s universities take part in education-exchange programs with Southern California and San Diego universities. Because nearshoring to Mexico has become a widespread practice, many of the country’s engineering graduates already have on-the-job experience in technology manufacturing.

Mexico’s highly-skilled electronics manufacturing workforce consists mainly of younger generations. You’ll be able to find workers for new jobs quickly since many recent graduates are looking for work. More importantly, that workforce will be there for years to come.

Exporting from Mexico: Trade Agreements

Exporting mexico trade agreements

Trade agreements help cut costs and protect companies. There are around 13 free trade agreements in place in Mexico, such as the United States-Mexico- Canada Agreement (USMCA). The USMCA decreased or eliminated many tariffs to reduce the cost of production. Additionally, technology companies enjoy enhanced intellectual property protection.

Meanwhile, the trade war between China and the US continues to make news and affect outsourcing to that region.

Mexico’s Robust Infrastructure and Supply Chain

Mexico robust infrastructure supply chain

Mexico has a top-notch manufacturing infrastructure, and its government has gone to great lengths to establish a top-notch electrical grid so manufacturers can work without interruption.

In 2018, the country’s government announced a $20 billion infrastructure improvement plan called the Construction and Modernization Program that will improve Mexico’s public transportation system. Since then, they’ve planned 14 projects to improve energy infrastructure and five to improve industrial parks.

Many of the upcoming infrastructure projects in Mexico will enhance their supply chain. Since supply chains between Mexico and the United States are easier to manage than those with China, this will mean good news for those nearshoring to Mexico.

Because nearly 85% of Mexico’s exports are bound for the United States, the logistics infrastructure between the two countries is among Mexico’s best. The Mexico-to-US logistics infrastructure saw a significant boost over the years under NAFTA and has continued to improve under the USMCA.

Product Quality and IP Protection

Product quality ip protection

The continuous improvement of the infrastructure, combined with Mexico’s educated, skilled labor force, leads to high-quality electronics manufacturing. Because Mexico is closer to the United States than China, your products will be less likely to get damaged along the way. Furthermore, you’ll be able to visit the manufacturing location more often and easily handle quality discrepancies.

In recent years, Mexico has also revised its intellectual property laws, enhancing protections for intellectual property. Mexico also belongs to the World Intellectual Property Organization which recognizes twelve different IP agreements. Meanwhile, counterfeit goods are produced in greater quantities in China than anywhere else in the world.

Socially-Responsible Labor Laws

Socially responsible labor laws

Customers have become more concerned about social responsibility and product origins. Work weeks in Asia may be as long as 60 hours, whereas Mexico has a strict 48-hour weekly limit. Mexico also has strict regulations governing occupational safety and goes to great lengths to prevent child labor. Additionally, Mexico has mandates that ensure your goods aren’t made with contaminated materials, protecting you, the factory workers, and your customers.

Mexico vs China: Benefits Close to Home

Many electronics businesses find themselves choosing between Mexico and China. While both locations have low labor costs and skilled laborers, an often overlooked advantage of manufacturing in Mexico is its proximity. The time-zone difference between China and the United States is drastic, meaning you’ll either have to stay up late or wait a day or more to communicate with your manufacturer.

Mexico vs china benefits

Visiting your manufacturing facilities is also easier when they’re closer to home. When products get made in Mexico, companies in the United States and Canada can visit the manufacturing facility more often. Flights are less expensive and faster than flying to China, meaning they won’t reduce your productivity or increase your business expenses.

Mexico’s proximity impacts transportation costs as well. Once your goods are manufactured, it’s cheaper and faster to receive them from Mexico than from China. Manufacturing locations in Mexico can get the finished product to the United States or Canada within 24-48 hours. Comparatively, you could wait two to four weeks to receive your products from China.

Manufacturing defects will sometimes happen, regardless of where your goods are manufactured. Still, these problems can be solved faster by manufacturers located close by in Mexico, thanks to the speed at which the goods can be shipped back to them.

Related Topics
Electronics Production: Upgrading Inventory Systems with Modern Tech

Inventory and supply chain management software and processes play a pivotal role in safety, efficiency, & security of electronics manufacturing operations.

90 Days to Prepare for Lunar New Year 2024

As we approach the Lunar New Year, which starts on February 10, 2024, it’s important to remember a shift in Asian electronics manufacturing.

Smart Manufacturing: Improving Safety and Efficiency With IoT

Digitization, connectivity, and the IoT are manifesting the next frontier in factory production.

Think nearshoring to Mexico makes sense for your business?

MacroFab can help.

Find Out More
About MacroFab

MacroFab offers comprehensive manufacturing solutions, from your smallest prototyping orders to your largest production needs. Our factory network locations are strategically located across North America, ensuring that we have the flexibility to provide capacity when and where you need it most.

Experience the future of EMS manufacturing with our state-of-the-art technology platform and cutting-edge digital supply chain solutions. At MacroFab, we ensure that your electronics are produced faster, more efficiently, and with fewer logistic problems than ever before.

Take advantage of AI-enabled sourcing opportunities and employ expert teams who are connected through a user-friendly technology platform. Discover how streamlined electronics manufacturing can benefit your business by contacting us today.