MEXICO CITY -- As soon as next year, Mexico plans to break ground on a 15-square-mile science park in Mexicali, just south of the U.S. border, Mexican officials said. Called "Silicon Border," the project is the brainchild of U.S. entrepreneurs who say Asia is attracting too much of the critical semiconductor industry and who want to keep more of it in North America.
"Asia has not just taken manufacturing, but technology, too, and a lot of people recognize that we need to do something about this," said D.J. Hill, chairman of the project, which has the support of Mexican President Vicente Fox. Hill said the park's infrastructure will cost at least $400 million. "We are not going to turn the tide" with a new high-tech park 100 miles southeast of San Diego, he said, "but we will take some of it to North America."
Hill said his development company has signed agreements to purchase 6,000 of the park's planned 10,000 acres and is in negotiations for the final parcels. The plans call for Silicon Border to open in phases, and Hill said it may take as long as 20 years to build completely.
Information technology and the latest electronic gadgets are driven by advances in semiconductor technology, a main focus of the science park.
Because the U.S. economy depends so much on electronics, Hill said he believes it is unwise to let semiconductor manufacturing transfer to Asia unchallenged. Pioneered in Silicon Valley, Calif., an area that served as a hub of research into using wafer-thin silicon chips as the brains of computers and other machines, the semiconductor industry has been migrating to high-tech plants in Asia.
George Scalise, the president of the Semiconductor Industry Association, estimated that about half the world's semiconductors are made in Asia, even though half the revenue goes to U.S. companies. The semiconductor market worldwide is worth about $214 billion.
"There is value in having geographic diversity. You don't want to have all your eggs in one basket," said Daryl Hatano, a vice president of the Semiconductor Industry Association, a California-based trade group representing 90 percent of the U.S. semiconductor industry.
If it develops as planned, Silicon Border would transform Mexicali, a border city of 900,000, into a high-tech center and demonstrate that Mexico is moving away from lower-end assembly plants, Mexican officials said. In recent years, many of the hundreds of Mexican assembly factories along the border with the United States have faltered in the face of rising competition from lower-paying Chinese manufacturers.
Eduardo J. Solis, chief of Mexico's office of promotion and investment, said in an interview that the state and federal governments have committed more than $2 million to the design and marketing of Silicon Border and are offering 10 years' tax-free status to semiconductor companies that move into it. "We are very much committed to offering a competitive package so it works," he said.
Solis said that a single semiconductor manufacturing plant can cost more than $1.5 billion to build and that the Mexican government is seeking to ease tax burdens on those companies, as Asian governments do, because of the jobs and benefits they bring to Mexico.
