Reports of the demise of manufacturing in Mexico have been greatly exaggerated. While a lot of high-volume electronics manufacturing left Mexico for China several years ago, Mexico’s electronics manufacturing services (EMS) business is growing.


"Mexico lost a lot of business to lower-cost Asian electronics manufacturing services (EMS) sites," says Robert Freid, president of Contract Manufacturing Consultants in Bellevue, Wash. "Most of that business will never come back." But Mexico seems to be "backfilling with higher-mix, mid- volume business, products that involve electromechanical assembly," says Freid.

Eric Miscoll, chief operating officer for Technology Forecasters, says Mexico is handling more automotive and white goods OEM business. "Mexico is ramping up as the low-cost location within the Americas," he says.

Freid says Mexico is convenient for many OEMs who are selling into the United States. "Companies look at communications convenience when deciding where to locate manufacturing. To have an EMS plant at the same time or within a time zone or two is preferred versus communication with Asia which means you’re on the phone 5 or 6 in the morning." says Freid.

While Asia will attract more manufacturing generally, EMS providers will not totally abandon North America. Miscoll says that OEMs and EMS providers will spread out manufacturing geographically and have certain manufacturing close to where the products are shipped.

Often times the total landed cost of building a product in North America or Europe for products that will be sold in those regions is less or at least competitive with products built in China or other Asian countries.