U.S. and Mexico to collaborate on semiconductors, electric vehicles

Mexico and the U.S. are reportedly planning to use the Biden administration’s massive investment in semiconductor production to push for an integrated supply chain and work with Mexico’s nationalized lithium industry to expand electric vehicle production. Both efforts are aimed at vying for Asia's advantage in semiconductors and batteries needed for electric vehicles and expanding production of both products in North America, officials from both countries said on Monday.

"Mexico has established a major part of the semiconductor supply chain, where U.S. companies such as Intel and Skyworks conduct R&D, design, assembly and test manufacturing," said U.S. Secretary of State Antony Blinken.

Blinken and U.S. Commerce Secretary Gina Raimundo spoke with Mexican President Andrés Manuel López Obrador earlier in the day about Mexico's opportunity to take advantage of recently passed U.S. legislation that offers a range of incentives that would provide $28 billion in semiconductor production $10 billion for chip manufacturing and $11 billion for research and development.

Mexican Foreign Minister Marcelo Ebrard said López Obrador laid out his plan to make the northern border state of Sonora a leader in lithium, electric vehicle and solar production. Lithium is a key ingredient in the production of electric vehicle batteries. The president said last month that he had discussed the idea with U.S. President Joe Biden.

Ebrard said. "We think Mexico will grow twice as fast as we think today, which means we can accelerate the pace of poverty reduction and improve domestic infrastructure faster.

Last month, López Obrador said the government had created a state-run lithium company to explore and mine the mineral. Mexico had nationalized lithium production in May.