Texas Border Business
By Roberto Hugo González
On November 5, 2024, Harlingen, Texas, became the epicenter of a high-stakes conversation about the semiconductor industry’s future in North America. COSTEP, The Council for South Texas Economic Progress, hosted the event, led by its CEO, Adam Gonzalez. It brought together stakeholders from across seven counties in the Rio South Texas region. The keynote speaker, Eugenio Marin, CEO of FUMEC (The United States-Mexico Foundation for Science), outlined a strategic vision for the region’s potential role in the global semiconductor ecosystem.
Semiconductors are the backbone of modern technology, powering everything from smartphones and laptops to advanced artificial intelligence (AI) systems and national defense equipment. As Eugenio Marin explained, “Semiconductors are embedded in every technology we use today. Their importance cannot be overstated.” The global semiconductor market will grow from $700 billion to over $1 trillion within five years. However, the pandemic exposed vulnerabilities in the supply chain, with chip shortages crippling industries like automotive manufacturing and consumer electronics. Marin emphasized that semiconductors have also become a matter of national security, given their critical role in defense and infrastructure.
Gonzalez, CEO of COSTEP, stressed the unique position of Rio South Texas in tapping into the semiconductor industry. The region’s proximity to Mexico, strategic location, and existing industrial base make it an ideal hub for semiconductor-related operations. Marin pointed out that the semiconductor supply chain is multifaceted, encompassing design, fabrication, assembly, testing, packaging (ATP), and distribution. While large-scale fabrication facilities dominate the headlines, regions like Rio South Texas can carve out a niche in ATP and logistics. “This is where Rio South Texas can thrive,” Marin said. “Focusing on targeted areas, the region can play a vital role in the semiconductor ecosystem.”
Mexico is pivotal in North America’s semiconductor strategy, particularly manufacturing and assembly. Marin highlighted Reynosa, a city just across the border from Rio South Texas, as an example of Mexico’s contributions. The city has a Micron facility that manufactures discrete semiconductors for U.S. defense applications. Mexico also has a strong presence in printed circuit board (PCB) manufacturing, which is essential for integrating chips into electronic devices. Marin emphasized the need for deeper collaboration between the U.S. and Mexico to create a seamless supply chain. “By combining U.S. innovation with Mexican manufacturing expertise, we can build a resilient and competitive ecosystem,” he said.
The CHIPS Act, a $54 billion federal initiative, aims to restore America’s leadership in semiconductor manufacturing. While the act focuses heavily on large-scale fabrication, Marin pointed out that its benefits extend across the supply chain, creating opportunities for regions like Rio South Texas. “North America cannot rely solely on fabs,” Marin explained. “The real challenge is integrating the entire supply chain—design, materials, ATP, and logistics—within our borders,” Gonzalez added that the CHIPS Act offers a unique opportunity for Rio South Texas to align itself with national priorities and attract federal funding for local projects.
Workforce readiness emerged as a central theme of the conference. The semiconductor industry requires highly specialized skills, from microelectronics design to ATP processes. Marin noted that regions like Arizona, where new fabs are being built, need help finding enough qualified workers. Gonzalez highlighted local efforts to address this challenge, including partnerships with Texas State Technical College (TSTC) and the University of Texas Rio Grande Valley (UTRGV). “Our region’s educational institutions are key to preparing the workforce of tomorrow,” Gonzalez said. “By aligning our programs with industry needs, we can create a pipeline of talent that supports long-term growth.”
Small and medium enterprises (SMEs) have a unique opportunity to integrate into the semiconductor supply chain. Marin explained that SMEs can specialize in niche services like ATP or supply raw materials and equipment. “This is not just a game for the big players,” he said. “SMEs have a vital role to play.” Gonzalez echoed this sentiment, pointing to the region’s existing base of family-owned businesses. “Many of our local manufacturers already have the skills and infrastructure to transition into the semiconductor industry,” he said. The conference emphasized the importance of starting small and building expertise in specific areas before scaling operations.
Texas has long been a leader in the semiconductor industry, with major players like Samsung, Intel, and Texas Instruments operating within the state. Marin highlighted Texas’s historical contributions, noting that nearly half of U.S. semiconductor jobs are based in the state. “Texas is not just a participant—it’s a global leader,” he said. Gonzalez emphasized the importance of aligning Rio South Texas with statewide initiatives. “Our region can complement Texas’s semiconductor ecosystem by focusing on ATP, materials, and logistics,” he said. The conference also highlighted Texas’s workforce training and infrastructure investments, offering a model for Rio South Texas to follow.
The conference concluded with a focus on creating a sustainable semiconductor supply chain in North America. Marin stressed the importance of collaboration between the U.S., Mexico, and Canada to reduce reliance on Asia. “This is not just about economics—it’s about security and resilience,” he said. Gonzalez pointed to Rio South Texas’s unique position as a bridge between U.S. innovation and Mexican manufacturing. “Our region can be the linchpin that ties North America’s supply chain together,” he said. The conference outlined actionable steps for achieving this vision, including infrastructure investments, workforce training, and public-private partnerships.
The November 5 conference in Harlingen was more than just a discussion—it was a roadmap for the future. Adam Gonzalez and Eugenio Marin laid a compelling vision for Rio South Texas to become a key player in the semiconductor industry. The region can secure its place in one of the world’s most critical sectors by leveraging its geographic advantages, investing in workforce development, and fostering cross-border collaboration. “The window of opportunity is open,” Marin concluded. “Now is the time for Rio South Texas to act—and to lead.”
