Chip Factories Envisioned for South of Border
SAN FRANCISCO — American investors and Mexican officials unveiled an ambitious plan Wednesday for an industrial park in Mexico on the California border to entice computer chip companies to build multibillion-dollar factories there instead of exporting production to Asia.
State-of-the-art factories on the 15-square-mile site in Mexicali, about 120 miles east of San Diego, could create as many as 100,000 high-tech jobs in 10 years, said Daniel Hill, chairman of Silicon Border Development, the private firm that intends to build the industrial park.
To lure would-be tenants, Mexican President Vicente Fox has agreed to waive taxes for 10 years for companies that move into the park, and the federal and state governments will offer other financial incentives and assistance, Hill said.
Silicon Border Development said it planned to spend $300 million to $400 million to build the park in Mexicali, the state capital of Baja California. Construction is expected to begin in early 2005 after the land is purchased, said Ron Jones, Silicon Border's chief executive.
Jones said the funding would come from "industrial investors" whom he declined to identify.
"We see no reason that operations can't be set up in Mexico and have all the cost advantages of Asian countries and compete equally or even better than them," said Jones, who spent 12 years in South Korea and Thailand working with chip firms including Texas Instruments Inc.
Asia is the fastest-growing region for semiconductor fabrication plants, or "fabs," which typically each cost $2 billion or more to build. Taiwan and China dominate the fab market in Asia; Malaysia, Singapore and South Korea also have chip plants. Virtually every circuit board built today contains chips from Asia.
"We've watched how everything's moving in that direction, and we were worried it may be going too far," Hill said at a news conference at Semicon West, a semiconductor manufacturing trade show here.
"Semiconductor companies and their customers are increasingly concerned over growing dependence on China," said Hill, a veteran of National Semiconductor Corp. who spent eight years in Malaysia. With constant military tensions between China and Taiwan, and between North and South Korea, "any issue over there could bring the chip industry to a halt."
Silicon Border Development hasn't signed up any tenants, though it says it is close to completing a couple of deals.
