Writing in Circuits Assembly this month, our longtime columnist Sue Mucha explains the forces that set the wheels in motion for Foxconn’s much-discussed deal to put a new campus in southeastern Wisconsin.
Some of the impetus starts, oddly enough, in Mexico, where a 2014 change in the status of flat-panel displays made them subject to that nation’s 16% value-added tax. The TV assembly industry crashed. Writes Sue: “In short, tax policy in Mexico appears to have contributed to a changed investment strategy in the TV assembly market. That didn’t just impact TV manufacturers; it also impacted the EMS companies they outsourced to.”
The gate swings both ways, according to a Reuters report today. The wire service says Amazon, Facebook and Oracle, among others are leading the way south, expanding operations and hiring engineers in Mexico, where the cost of living is lower, access to talent is rising, and US immigration laws (and attitudes) aren’t in play.
Could this be the tip of a coming iceberg?