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The U.S. and Mexico will team up on an AI chip supply chain

Adhikansh Gupta

• 2 min read
The U.S. and Mexico will team up on an AI chip supply chain

The U.S. is partnering with Mexico to boost chipmaking efforts amid the AI chip war between the U.S. and China. The partnership is funded by the International Technology Security and Innovation (ITSI) fund from the CHIPS and Science Act. Mexico will assess its semiconductor ecosystem for potential joint initiatives with the U.S. Neither government has commented on the partnership. Intel plans to invest $100 billion in U.S. semiconductor manufacturing.

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htmlFAQ: U.S. and Mexico Collaboration on AI Chip Supply Chain

Frequently Asked Questions

1. Why are the U.S. and Mexico partnering on an AI chip supply chain?

The U.S. and Mexico are partnering on an AI chip supply chain to strengthen their chipmaking efforts amid the accelerating AI chip war between the United States and China. This collaboration aims to boost the manufacturing capabilities and resilience of the supply chain in North America.

The collaboration will take place as part of the U.S. CHIPS Act, a law created in 2022 that established a $500 million fund for developing the semiconductor supply chain. The CHIPS Act, along with the CHIPS and Science Act, lays the groundwork for improving American manufacturing, supply chains, and national security through investment in R&D, science, and technology.

3. What is the goal of the U.S. and Mexico's semiconductor collaboration?

The goal of the U.S. and Mexico's semiconductor collaboration is to create a strong and secure semiconductor supply chain. It is also aimed at lowering costs, creating jobs, strengthening supply chains, and countering strategic competitors, such as China, in the semiconductor industry.

4. How does the partnership between the U.S. and Mexico align with broader supply chain strategies?

The partnership is part of a broader strategy by the U.S. to work on supply chain disruptions in critical sectors with allies and partners. For instance, the U.S. has also coordinated efforts with the European Union. This alignment ensures diversified, resilient supply chains and reduces dependency on single or challenging supply sources.

5. What are some potential benefits of North America becoming a semiconductor powerhouse?

If North America becomes a semiconductor powerhouse, it could lead to an increased market share in technology manufacturing, enhanced economic security, and an improved geopolitical stance against competitors. It could also lead to more jobs and innovation within the U.S., Canada, and Mexico.

6. Are other countries involved in the AI chip supply chain partnership?

While the specific partnership mentioned focuses on the U.S. and Mexico, other countries are also key parts of the semiconductor supply chain in North America, including Canada. The broader international strategy for the U.S. involves collaboration with multiple allies and partners.

7. How does the collaboration between the U.S. and Mexico affect the USMCA agreement?

While the direct impact on the USMCA agreement is not explicitly stated, increased collaboration on supply chain initiatives such as semiconductor manufacturing is likely to lead to strengthened economic ties and mutual benefits under the principles of the USMCA, which aims at open and fair trade between the U.S., Mexico, and Canada.

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