 Hello and thank you for joining us today, a short announcement in Spanish for our Spanish-speaking audience. Hola y muchas gracias por acompañarnos. La conversación de hoy ser en inglés, pero contamos con interpretación simultánea en español. En la parte inferior de sus pantallas pueden dar clic en el botón del mundo. Welcome to North America's Semiconductor Moment. My name is Isabel Migoya and I'm the Senior Coordinator of Convergence Lab. At series of events, Arizona State University organizes in Mexico with the goal of exploring shared challenges and opportunities. We organize these events in collaboration with partners like Future Tense. Future Tense is a partnership of Slate Magazine, New America at Think Tank in Washington DC, and Arizona State University that explores the impact of technology on society. Special thanks to Mia Armstrong Lopez, managing editor of Future Tense, and to Angela and Riley from the New America events team for making this possible. We're really excited for our conversation today that we'll explore the tremendous opportunities for stronger semiconductor supply chains across the United States and Mexico, as well as efforts to date and what lies ahead. We encourage you to submit your questions through the Q&A box at the bottom of your screen. So now let me introduce you our panelists. Rena Paul-Watson is a director for Global Policy with the Semiconductor Industry Association, and I must say she's a proud ASU graduate. David Talbot is Associate Director of Global Policy at the Milken Institute. Gerardo Lameda is a head of cooperation and education affairs at the Embassy of Mexico in the United States. And as our moderator, we have Kevin McGuinness, who is the Managing Director for Strategic Technology Initiatives at ASU. So with this fantastic lineup of speakers, I turn the floor over to Kevin to start this conversation. Thank you so much, Kevin. Wonderful. Thank you, Isabel, and thank you to New America Future Tense and the Converter & Slap for hosting this conversation today. I'm so grateful for the opportunity to be a moderator with a wonderful group of experts that we've assembled. We have views of think tanks, industry, the Embassy of Mexico and the United States here. Before I introduce our panelists and turn it over to them, they're the ones you want to hear from. I'll just take a minute to set the stage for this conversation. So if you're following the news, you probably see something about semiconductors almost daily. They're tied to national security, trade, economic development, and for good reason. So semiconductors power our digital economy from the phone in your pocket to the satellites in space and basically everywhere in between. In the last couple of years, you may have experienced semiconductor supply chain disruptions caused by COVID-19. I think that brought home for many people the importance of these small, tiny objects that power our daily lives, whether in cars or TVs or defense systems, we saw a lot of disruption in the supply chain, and it really emphasized the need to have more resilience related to supply chain production here in North America closer to home. The response to some of those challenges, the United States government puts together a package called the Chips and Science Act that includes $52 billion in subsidies, tax credits, and investments, all with the goal of bringing advanced manufacturing of semiconductors back to the United States and also building supply chain resiliency. There's been a lot of focus in the dialogue around the United States when it comes to those supply chains, but really this is a global challenge. It's not just about the United States and the Chips Act isn't only about the United States, it's also about our close partners as well. That's because semiconductors require a highly global supply chain, and also it would be prohibitively expensive to bring every element of that supply chain back to the United States. I think the estimates something like a trillion dollars to bring all pieces of the supply chain back to the United States. So we need to think about how to work with our partners and allies in order to build supply chain resiliency in order to make sure we're not too dependent on countries that are far away and might be disrupted in terms of production for these critical materials. So what better place and what closer partner than Mexico to work with, and there are many reasons why. Mexico's geographic proximity, strong manufacturing sector, favorable terms of trade, all those things uniquely positioned it to join a US-led global supply chain reshuffling. And as we embarked on this journey, it involves a lot of partners and we've been very fortunate as Arizona State University to work closely with the Embassy of Mexico and thinking about some of these challenges. Mexico's ambassador to the United States, Ambassador Matizuma, he visited Arizona State in November and agreed to a memorandum of understanding with our president, President Michael Crow, that sort of formalized our ability to cooperate around the Chips and Science Act to think about what opportunities we might pursue together, whether in terms of workforce, R&D, or other shared opportunities. And we're really grateful to the entire team at the Embassy of Mexico for that work with us. And now we have an opportunity to kind of take that to the next level and work with groups like Semiconductor Industry Association and other think tanks like the Milken Institute to really define the scope of the challenge and then make sure that when it comes to the supply chains, we're taking a holistic approach that includes not only the United States but also our close partners in Mexico. So with with that as kind of context and to help set the stage for our work. I'd like to turn it over in a moment here to Rena Paul Gussin, who Isabel also introduced but just to give you a word of background about her. She's responsible for all international trade policy including trade agreements, market access and emerging market development on behalf of the Semiconductor Industry Association SIA. She's also an attorney and previously served as General Counsel at MicroTech, a 3D printed chip packaging company. She has experienced beyond semiconductors to in global health policy and global intellectual property so really fortunate to have her here today. She also I wanted to thank SIA because they've been such a wonderful partner to us over several years not just in my current role here at Arizona State but in my previous roles in the federal government. I've always been really fortunate to get to work with SIA and I think they bring real data and rigor to policy discussions and we're just grateful for all the work they do to advocate on behalf of the industry. I'll pose my first question here to Rena and the question is for audience, you know, members of the audience who might not be familiar. Can you tell us a little bit about the Semiconductor Industry Association, what is it what's its role in helping the industry navigate complex questions like the CHIPS Act and like global supply chains. Sure. And thank you so much Kevin we're really excited to be part of this panel. To introduce SIA, SIA is the voice of the US semiconductor industry, the semiconductor industry association advances policies that help the industry grow and unites semiconductor companies around common challenges. SIA seeks to strengthen US leadership and semiconductor manufacturing design and research by working with Congress, the administration and key industry stakeholders to encourage policies and regulations that feel innovation, to improve health business and drive international competition. So SIA advocates and organizes industry action around a few key issues. So first defining strategies to promote and maintain world leadership and technology for our members, advocating for public policies that provide a fair field for competition whether that's through trade agreements, or other alliances, or promoting fair and open trade and tracking and distributing statistical information on market trends for our membership as well. So that's a little bit about what SIA is. Wonderful thing. Thanks Rina, and that's a helpful context for our next panelist to introduce himself so David, thanks for being here David Talbot for the audience is associate director for global policy at the Milken Institute. In that role he leads institutes research on key issues including global markets, international trade, investment, regional economic competitiveness and energy transition. Prior to milken David also served in the US Department of Commerce under Secretary Pritzker, and there he focused on commercial diplomacy he led a number of signature initiatives to expand economic relationships, including with Mexico. He also has worked on several presidential campaigns as a PhD in international political economy so he's a real expert in this area and we're especially fortunate because he spent the last several months looking at this specific question the question of US Mexico supply chains, analyzing it thinking about potential recommendations to move the relationship forward. And so my first question to you David is, how did you become interested in this topic, and why do you think this might be a critical moment for us in terms of semiconductors and the relationship between the United States and Mexico. So thanks again for for having us Kevin it's a real pleasure for me to be here with Rita in Florida in particular and you as well because you know over the course of the last few months I've learned so much about this topic from the three of you. So this is a really great opportunity to share some of those findings and continue the discussion. So be remiss if I didn't know that the milken Institute so we're a nonprofit and nonpartisan think tank located in Los Angeles but with offices around the world. We are really focused on building our presence in Mexico and our research on Mexico so we actually had our first event in Mexico City last week, and are launching into a much broader project on near showing that we hope to publish this fall but semiconductors are really the obvious place to start both because of the industry's importance in the you know the overall global economy and then also the ongoing shift in global supply chains that we're seeing in the current moment so you know as you mentioned at the top, you know the chips act is really, you know, what is driving this North American semiconductor moment so the US past the chips act in response to pandemic era supply chain bottlenecks. And then also our rising geopolitical tensions with with China and the $52 billion are are focusing in senses and subsidies and R&D. So this whole has you know with some US allies created some some new tensions and new frictions, particularly with European Union but in US Mexico context it really creates remarkable opportunity for cooperation. In my perspective, US officials are looking for viable alternatives to China and you know, supplements to, you know, Taiwan and other Southeast Asian nations that are critical for for co production in semiconductor supply chains. For Mexico, the act really presents an opportunity to help build on its existing footprint in the semiconductor industry, and really carve out a bigger space in a high tech and high growth industry. I think for the bilateral relationship it's it's quite important as well I think it's it's one where the frictions, all too often are what dominate the headlines and there really is just such a deep strong partnership. And not purely in the economic space but also, you know, also the social. So over the last two years the US and Mexico put in place a number of cooperative bilateral and trilateral mechanisms with Canada as well. Through the US Mexico had like a high level economic dialogue and also the North America leaders summit, but you know the window here is closing so I think that the time of this conversation is very important. I think that, you know, this year in particular, I really need to see some forward progress to make sure that you know both the US and Mexico are able to capitalize on this, this opportunity during the current industry investment cycle. Well thanks David and and great job teaming up our next speaker who has been involved in many of those dialogues you mentioned whether the North American leadership summit, high level economic dialogue. Our next speaker hereto Lameda is at the center of all of that and he's the head of cooperation and education affairs at the US Embassy in Mexico in the United States. It's a wealth of experience and senior roles across the government of Mexico, including previously leading the embassies trade office serving as economic attache as well as an official in the Mexicans Ministry of Economy. I'm so grateful to have had the chance to work with hereto over the last year or so, and really the entire team at the embassy of Mexico. It's really I think thanks to their tireless efforts that this conversation is possible today that the industry is interested in Mexico that there's this moment where we might be able to have real cooperation around semiconductor semiconductor supply chains in our two countries. And so with that, for a question to you, how you know why is the Mexican government interested in semiconductors and what's the main driver behind it and all the attention that you paid to it because it really has been a lot of work over the last year that I know you and the entire team have focused on this industry. Thank you for your kind introduction Kevin. And I would like to thank first the invitation to participate on this event. With a recent state university to Andres Martinez, Paula Hidalgo, to Angela speed a lead, and the new American team as well, and it's a very big one. And on behalf of Ambassador Moctezuma, the ambassador of Mexico in the US, he sends his regards and readings and best wishes for the success of this event. And it's a pleasure to share this panel with distinguished friends like Rena and David as well. So in response to your question, Kevin, for many reasons, the semiconductor industry is critical for the future of North America. The competitiveness of many industries depends on the semiconductor industry and its supply chain. It is also the base of the digital economy as you all know. And that North America is urged to build a competitive ecosystem for the semiconductor industry that does not depend on other regions abroad. We need to make North America self sufficient in the whole process of semiconductor and its supply chain. So it's a matter of national and regional security. And as you all know, there is not a single country in the world that by itself is totally integrated with a full production process of semiconductors. So several countries have specialized in different processes of the production and stages of the supply chain. Therefore, it seems difficult for the United States to develop all the production process of semiconductors alone in the short run. So the US and North America needs allies and reliable partners. And here is where Mexico plays a relevant role. Mexico is a competitive and reliable ally to complement the semiconductor industry in North America. We are top trading partners of the US and have strong bilateral relations since decades. Over the years, Mexico has developed an advanced manufacturing export platform of relevant industries and many other products. The USMCA has a reliable legal framework that provides certainty to business, trade and investment. We have strategic location and proximity to the main semiconductor facilities in the US, for example, in Arizona, Texas and California. Mexico has developed efficient infrastructure and connectivity in one of the busiest borders in the world in terms of trade and customs. Mexico has a network of 13 free trade agreements with over 50 countries. So it means a lot of trade without import duties. We also have abundant talent and workforce. Mexico has one of the largest ratio of graduates in engineering in the OECD countries. So nobody understands better than Mexico, the American way of doing business. And among other factors, Mexico is ready to complement the US semiconductor industry and its supply chain. And just as an example, Tesla's recent announcement for a large investment in Mexico confirms that we are ready to continue complementing the industries of North America and its supply chains. Thank you. Thanks for that. And I think the approach that the government of Mexico has taken, you know, looking at different elements of the supply chain, figuring out where the comparative advantage might be has been very strategic and thanks to your efforts to help shape to shape that. A question back to you. Since the Chips Act passed last year and even before that we've seen tremendously significant investments in the United States related to semiconductor manufacturing facilities and some of the numbers are just incredible 200 billion. In some cases up to 80 billion in Arizona specifically, as companies are thinking about making these huge huge capital investments, you know, what are what are they taking into account what are the factors that sway their decision one way or the other when they're deciding where to make such large investments. Hi, sure. The industry is kind of in a potential shift at the moment. We're coming out of the pandemic, you know, we have seen that we need to be prepared for shocks to the supply chain and need to find ways to be resilient. Part of this is addressing the national security issues around chips and seeking to relocate our supply chains to locations with our natural allies. So part of this has meant for the US to invest heavily again in US manufacturing. The semiconductors to give a little bit of a background were invented in the US more than 60 years ago, and US chip companies continue to lead the world in researching design, designing and producing the world's most advanced chips. China's global leadership and chip technology, however, is under greater threat than it has been in decades. The share of global chip manufacturing capacity in the US, for example, has shrunk from 37% to 12% over the last 30 years. And it's mostly due to aggressive government incentives offered by overseas competitors. The world's chip manufacturing capacity is now concentrated in East Asia, with China projected to command the largest share of production by 2030, due to its government's massive investments in this sector. So the dramatic decline in the US share of global chip manufacturing, coupled with insufficient federal investments and semiconductor research and design undermine our country's long term ability to produce the advanced chips needed to support our economic recovery, power military and critical infrastructure, create new high paying jobs and reduce costs for clean energy technologies, you know, and drive other innovations and the must run technologies of tomorrow. For our country to succeed in the future, we must continue to lead the world's in semiconductor technology. But as Gerardo was just saying, we can't do everything alone. We need to make sure the supply chain involves our partners who have specific expertise and a competitive advantage in certain parts of the supply chain. So as South East Asia hold most of this supply chain, the location is still risky due to its proximity to China. The industry considers several factors when they're evaluating potential new locations. First would be the trade environment. How easy is it to move items in and out of the country as you know, in the development of a chip it sometimes goes to hundreds of different locations before becoming a finished product, and that time in between is just critical. Second, the business environment, the taxes, customs, times, and permitting issues in general is a business indexes. Third is the reliable availability of water and electricity. So that needs to be provided in large amounts without interruptions. And fourth and you know equally important is the availability of workforce, both for training and development, and there's a large shortage across the world. So we're all kind of seeking what to figure out what we can do about that issue. Well, thanks, Rina. And I think that last point that you made on workforce is especially important. I know all of us have been thinking a lot about it. Arizona State University has been very focused on it. And I think we'll come back to that later in the conversation, but thanks for that overview because I think it helps to explain why are we seeing these huge, huge numbers and what are some of the factors that lead companies to choose one place over the other. Next back to David, we've had a number of conversations about this topic over the last several months, as you've been learning more about the US-Mexico relationship, especially related to supply change. What surprised you? You know, you've looked at a lot of different countries. You've looked at this topic for quite a bit of time. What was unexpected as you went about your research? Yeah, thanks, Kevin. I think that's a fantastic question. And, you know, Rina's really helped team me up well here. I think there are two things that I would point to in particular as, you know, surprises that emerged over the course of my research. And one more focused on the US and one more focused on Mexico. In the US context, for somebody whose background is heavily in international trade and investment is, you know, particularly compared to the three of you, a relative newcomer on semiconductors, I was shocked by the scale of the challenge in building for the US. Actually, building was only at semiconductor supply chains. I think, you know, as you and Rina were just discussing the CHIPS Act is driving a huge surge in US investment in both semiconductor fabs and then also, you know, manufacturing equipment. But as the same goes, you know, a semiconductor supply chain is only as strong as its weakest link. And I think here when you're looking at, you know, back end of line manufacturing processes, so assembly test and packaging, and then also even after that when you're looking at device assembly, those are two areas where the US is really going to have a very difficult time, you know, reshoring any of that. So I think it really underscores the opportunity that's available for, you know, for Mexico and for other US partners as the US looks to shift some of these supply chains or at least diversify its supply chains away from, you know, East and Southeast Asia. You know, there's some pretty wild stats on that actually I'll grab here quickly. So I mean on assembly test and packaging the US maintains only 3% of global capacity and has no commercially competitive producers or printed circuit boards and substrate which are the material components of those back end of line manufacturing processes, whereas 80 for 80% of global ATT capacity and 95% of substrate suppliers are still in Asia so I think those are just some, some key data points which really underscore, you know, the opportunity for Mexico and also just the level of the challenge for the US in building building resilience through through relocation to investment diversification. I think when it comes to Mexico, you know, I think a lot of the barriers to investment are well known and broadly discussed some were just raised by Rena, but I think one of the things that really emerged in my conversation into somewhere that the, you know, the Mexican government has really been, you know, focusing a lot of energy and attention to, but it's the it's the lack of information as a barrier to investment so I think this, this is can really be divided into two sub components. So I think one is actually mapping the existing ecosystem, particularly at the level of second and third tier suppliers so they're already, you know, for, you know, back end of line facilities in Mexico that have been there for a long time so there is this established footprint. So Texas Instruments, Skyworks and Infineon. And earlier this year at the North American Leaders Summit, the US, Canada and Mexico reached an agreement to map North American semiconductor supply chains and I think it's imperative that this moves forward quickly because, you know, through my conversations it's very clear that these, you know, the Mexican facilities are already sourcing a lot of their, you know, materials and components from within Mexico but being able to identify, identify them for, you know, a broader industry audience so that they can, you know, both these new US fads and also potential future investments in build on this existing footprint is key. I think the other key point that really emerged here is that because you know there are four, these four facilities and most of them have been there for decades at this point. I think there's limited insight into the total cost of ownership for new investments so I think, you know, a lot of this you know the SIA, other industry groups have been very actively involved. They have their own partnership with BCG and other governments and sort of mapping out what it costs to, you know, construct new, you know, semiconductor fabs but also back in facilities in the US and other countries. And I think that as companies are considering making new investments in Mexico that, you know, really trying to increase information awareness and availability of data on how much, you know, the actual lifecycle costs of these investments will be are really key. Thanks David and I think, you know, a couple of things, and this is just for our audience, you know, I'm not a semiconductor engineer but you might hear a lot about packaging. And when you hear about packaging it's not like, you know, the box that we put it in and that ship it in it's actually the interconnects after we finished making the chip, you have to then connect it to other chips that's the package and that's actually a really critical part of the process that even if we build all these facilities in the United States you may have been reading about. Right now, almost that doesn't occur, as David said, in the United States we might have to actually ship those ships still back over to Asia to be packaged before they can be put into a finished product and used in your cell phone or your everyday devices that you might have around your house. So just keeping in mind that idea of packaging as a key element of the supply chain that we still have some gaps in. Question back to Gerardo. Again, a little bit building on what you were saying before. What would it look like if we did deepen the supply chain between the United States and Mexico what are the key areas and and maybe I know you've been focused on packaging. How did you arrive at that what what was some of the thinking behind packaging as a key potential area for Mexico to focus on. David, that's a good question, especially because the position of Mexico is to complement the industry and the supply chain of the US and Canada. And one way of complementing in a most effective and competitive way is through the labor intensive processes where Mexico has a comparative advantage. The labor intensive processes in the semiconductor production is related to design and the back end which is assembly packaging and testing. So that's the areas where Mexico has a better position to to be part and be considered a complementing partner in this industry. And this is one specific area that we are developing. We are also focusing in being a supplier of materials and inputs relevant to the industry, where there is a lot of potential for Mexico. And as you also know, and in complement to what David said, which I am glad that he is very knowledgeable of Mexico industry, and he is very involved. So the new semiconductor industry is not new, because we have had the major semiconductor companies since many decades ago, for instance, Intel in Jalisco since since the 90s sky work solution since 1964 in Texas Instruments since 1984 in a was calientes and the most recent was in Phoenix in Tijuana. So this is critical for the region. As you know, we all share as neighbors and partners in the US MCA, we share common concerns, common challenges and common opportunities. So we all want to develop North America to become again the most dynamic region in the world in terms of competitiveness in terms of technology workforce development. And we are really committed to bring back to the US and to North America the leadership in the production of semiconductors. Thank you. Thanks for that. That's a great goal. I think that goal of interconnected connectivity and then also competitiveness for the entire continent is the vision that we should all we should all drive towards. Well, I'm just going to mention to our audience we're at about 230 Eastern time will probably take questions from the audience in about 15 minutes so if you haven't submitted your questions already. Please think on them please submit them and then we'll turn to a few from the audience and I get about 15 minutes. And then for our panelists in sequence and then we'll kind of go to open open discussion. Farina, specifically on Mexico, you know, both Harado and also David mentioned some of the existing facilities that semiconductor firms have have in Mexico. How, how does the industry view Mexico today as this potential site of expansion. What factors do they look at when they're thinking about expanding or for the first time relocating there if they don't have existing operations there. So I guess put Mexico in context for the current set of decisions around our semiconductor partners. Sure. As part of the North American semiconductor corridor, which David touched upon previously. I think the industry is looking seriously at Mexico and particularly as a site for additional ETP that advanced testing and packaging the proximity. The proximity to the US is very attractive for security reasons. And it is, it is certainly true that all of the governments here would like to see more in this assembly testing packaging. However, a few challenges do need to be overcome. First, as the other locations are well establishing in our well established and providing significant government subsidies for these very costly investments. We need to show some federal indication of interest in being competitive in that way. It would be impossible for the companies to invest in places that cost more, despite security concerns of the government. Second, as we also touched on the workforce development piece needs to be addressed to solve the labor shortages that would result from additional investment as well. Additionally, favorable and reliable tax schemes need to be implemented. If these issues can be tackled, an ecosystem could be developed around certain areas that are already involved in the electric vehicles and electronics manufacturing to create hubs for the semiconductor supply chain. Thanks for a great, great summary of both the kind of opportunity and then also some of the challenges and we have a great group here to talk about I think some of those challenges as well. David, you're summarizing your research turning to you. What are three recommendations you make and maybe if some of those recommendations might address some of the challenges that Rena raised. What do you think are the three key things that we need to do to move the relationship forward. Yeah, absolutely. And I think, I think it's a great, it's a great question. I mean my, my overarching takeaway here, you know, as I mentioned up top really is that this this opportunity is real this opportunity exists. There's a lot of momentum building toward it but there are some, you know, key things that need to happen in quick order in order for you know both the US and Mexico and the industry to really capitalize on this on this opportunity. And I think the first thing that I would note, which is an area where, you know, the Mexican government has already made significant progress is brought to just, you know, provided a very full overview of but it's really, you know, preparing a narrow and highly targeted recruitment strategy and I think continuing to publicize that so really focused on ATP. I think it's important to keep this strategy obviously aligned with Mexico's broader economic development strategy and the plan sonora, which I know will probably share some additional insight on here as well. But I worry that by merging the semiconductor strategy with the broader plan sonora risks is dilution. I think that for the strategy another key area where I think both the the SIA and industry and both the US and Mexican governments could really, you know, improve upon is to do a better job of working more closely with North American end users. The auto and electronics industries in particular know the couple of the major North American auto manufacturers have already been signing agreements with chip manufacturers in order to try to build out there, you know, the resilience of their own chip supply chains and I think that that's just a great example of, you know, how working with end users can really play a role in building North American resilience. I think the second part is one that we already touched upon and it's really taking sort of an immediate set of actions to bend to bend the cost curve, you know incentives are an important part of this, even if it's sort of an ugly side of the business for some. And I think both because of these like cost, you know, cost questions but also because incentives really serves a coordination function in an industry that really benefits from, you know, from, you know, co location. Nobody wants to be the first to jump and obviously Mexico does already have this existing footprint but I think that by using incentives as part of this broader strategy to really, you know, unify and get industry on the same page you're going to be able to see a number of, you know, hopefully a number of new investments and out simultaneously would love to see those also paired with a broader package of commitments I think the US can also really up its up its game on this front as you know, part of the chips and there was a 500 million over five years that has been allocated the State Department to, you know, to help build a US international partnerships to strengthen supply chain resilience I'd love to see a significant portion of that be dedicated to, you know, partners working on strengthening the US Mexico semiconductor supply chains. I think the third key thing here which we've seen really moved to the forefront of the news cycle over the last, you know, two weeks even since this panel has been announced is the security environment I know both the US and Mexico are, you know, very focused on, you know, improving the security environment across the, you know, across the across both countries. But I think in particular with a, you know, an industry that's, you know, you know, so high value add, you know, expensive, you know, that the prospects of, you know, that really are going to weigh on, you know, investments so I think that, you know, seeing progress across all three of those those areas is really going to be be critical. Thanks. Thanks, David and yeah really tied it to some of the current events we've all been seeing and just want to put a pin in that $500 million investment that you mentioned related to the State Department and the Chips Act. So, as David mentioned for the audience benefit this is a small piece of the overall $52 billion package from the Chips and Science Act specifically targeting US cooperation with allies around the world. So not not just North America but but all of our allies and a key part of that that could be working with Mexico and and we also think could be working on a workforce specifically which is a shared challenge that's come up in a couple of the conversations so far. And so my last question for Herdo and then we'll kind of do more open questions. Herdo, what has Mexico been doing to become even more attractive for for semiconductor companies you heard David mentioned briefly plans to Nora. What is that and what does it mean specifically for semiconductors companies. Thank you Kevin for this relevant question for Mexico is very important to have this opportunity to share what we are doing. And first, I would like to begin with what we have been working with the semiconductor industry association with SIA, we are very grateful and we recognize all the coordinated work that we have been developing for over a year. We've got Joe Neofer, Jimmy Goodrich, Rina Palgetsen and all the team. They have been very supportive, and we value the partnership that we have with them. And as you know Kevin we also have developed a very strong partnership with Arizona State University. As you may know, Arizona State University has the largest school of engineering in North America, and they are very specialized on semiconductor industry in research and development, and the partnership that we create and we subscribed last year with Arizona State University and the state of Sonora and the embassy in order to develop the curricula of the workforce development for the semiconductor engineering in Mexico is very relevant. And we also are aware of how important are the incentives for the industry. We know that the Asian countries are very aggressive, offering packages of incentives very substantial, and Mexico is working on this. We are developing different projects aimed to create this competitive ecosystem to the semiconductor value chain in Mexico. And for the president of Mexico Lopez Obrador, the starting point is Sonora as a pilot program. So Sonora will develop and create synergies for the rest of the country and an ecosystem that includes clean energy, human talent, infrastructure and the electron mobility. This is a substantive package incentives that the plan so not includes as a binational security strategy to promote the automotive semiconductor and the electron mobility industries. The key elements of plan Sonora are the electron mobility supply chain that includes value added to the critical mineral sector and integration to the supply chain from the lithium exploration and extraction to the inclusion of lithium in electric vehicle batteries and electric vehicles. Number two is the human talent. So curricula programs, according to binational strategy focused on workforce development with collaboration between state and federal governments and the private sector and the Arizona State University is part of this effort. Number three clean energy in Sonora, there is the biggest solar energy generation plant in South America. This solar plant is located in Puerto Peñasco, which is the seventh largest worldwide. And there are plans to build more clean energy plans close to the US border in order to make sure there is the supply of clean energy. To California, Arizona, New Mexico and other US Southern states. Number four is the cutting edge infrastructure infrastructure program as part of building a modern infrastructure in the border states of Mexico with the US. This plan includes Northwest logistic gate plan to improve land and connectivity by air to several projects. So, in short, we are developing these substantive incentive package in order to attract all the interested stakeholders of the industry of North America. Thank you. Thanks for our dough and as I'll ask one more question for everybody and then we'll see any questions from the audience and this question ties back to a few remarks we've had about the urgency of this moment. And it's a question of, what do we need to see by the end of this year so we're in March, not quite halfway through the year. The country is making decisions rapidly about its investments. In terms of the US Mexico relationship and semiconductor specifically. For all of you know what do you think needs to happen by December for us to move forward and for this potential partnership around semiconductors to be successful. I'll jump in. I would start with the workforce piece, which you know we've talked about. You know across all of the countries, you know both and I was in both in the US and in Mexico, there needs to be a real collaboration between the industry and the curriculum. Graduates, you know, are finished with their education now. They're almost always unprepared to work in this industry because it's very specialized in these training. So there needs to be a training program which is developed in conjunction with the companies. And I think creating those alliances are very important. And this you know I think by the end of the year for this partnership to go forward we need to see some clarity on tax incentives around this education piece, as well as the incentives that we that we spoke about further you know I think there's been a lot of encouraging news out of the different states. And hopefully we can see something on the federal level. There are some thoughts next if we want to go in and stay stay in order here. Yeah, I mean I think building again on what on what Rena said, you know I came up with a list of, you know, quickly five things that I would, you know, really want to see by the end of this year to continue driving progress. The first is, you know, using this, you know, platform this cooperative mechanism that's already been developed through the Hled and through the nulls the high level economic dialogue in the North America leader summit. I would love to see that move beyond, you know, cooperation and new process oriented announcements toward really executing upon some of the more concrete commitments that have already been announced, you know to that really come to mind or the, you know, pilot project and the supply chain mapping exercise that I saw earlier. And second in Rena's comments, I think, you know, I would love to see, you know, a more detailed, you know, more detailed information both from the both from the Mexican government around potential incentives but I think there's also a big role for industry through one of these TCO total cost of ownership studies that I mentioned earlier. I think that that's a real opportunity to help, you know, increase insight into what the costs actually are because we know we can talk about reducing costs all day but if you don't have a baseline from where you're reducing from or sort of what the current level of cost and happiness is. You know, I think that that can certainly both you know improve the quality and sort of, you know, help, you know, help those designing incentives know where to target them. I think it's increased the quality of public policy in addition to, you know, helping better inform, you know, industry investment decisions would love to see the State Department direct some of this funding toward US Mexico projects including the ASU, you know, the government workforce development initiative I think that's a prime candidate for that funding. And I think finally I'd like to see some improvement wins I think if, if there isn't actual if there aren't, if there isn't progress on investment decisions by the end of this year I worry that the window is is sort of reaching its, you know, got a lot of time still but I worry that that will mean that the window window has has been at least partially invest. Yeah, and I would like to jump in and compliment the comments of Rena and David. And I agree timing here is critical. We need to deliver results in the short run. And that is why the three governments are committed, strongly committed I may say in working together and in coordination in order to develop a better competitive and feasible ecosystem in North America for the semiconductor industry. As you all know, and as David also mentioned, in the North America leader summit that took place in January of this year in Mexico, the three presidents agree to organize the semiconductor forum and critical minerals in order to map in North America. What are the opportunities that we that we have what are the stakeholders and to develop student mobility in coordination with the three governments. So, one of the things that we will like to see and that we're working on is to advance on these project programs that we are coordinating and developing with the US and Canada as well. And we, we know that we have to work together we have, we know that we have to act fast, and we are committed to do so through the mouths and North American leaders summit, and through the high level economic dialogue between the US and Mexico. All the agencies of Mexico are fully involved and free committed to provide results on this regard. Thank you. Thanks for I think that sets a good target for all of us working together and with other partners and not here today to try to get the relationship really at full speed by the end of the year and that will look like hopefully workforce pilot programs incentives, big announcements in terms of investment if you know we could be in December and have all those things moving forward I think we could all be really really pleased with the work that's going on this year. So with that, I'll see if Isabel has any questions from the audience that she'd like to pass along if not I have more questions to but I know she's been keeping track of our audience questions so is about over to you. Thank you, I mean yeah we have a few questions from the audience. I'm going to start with this one. And how can the partnership between Mexico and the United States address at this connect between research on semiconductors and the general semiconductor industry. How can, how can the partnership reach the technology body of this. Well thanks as well maybe I'll just take a quick stab at it, and if others want to weigh in as well. You know, at ASU we've been really focused on moving ideas to prototypes to full scale production so every summit semiconductor starts with an idea but turned into a product takes a lot of steps. A lot of researchers have to work on that and companies. And so if you think about ways we might do that on both sides of the border. A big idea that's been proposed in the past is maybe a shared national lab that could work on semiconductor technologies together between our two countries. The key being access to these really specialized facilities and infrastructure to help turn concepts into prototypes and and actual products over time so that's my big idea on that one. We're not there yet, we have to start with start small work towards it but I think over time, if we want to really supercharge their relationship and come up with great products together. That's one way we might do it but we'd love to hear what others think on the panel as well. Yes, well I would like to jump in. This is a very relevant question as well, especially because here in Mexico we are trying to learn from the success stories and what the success. Operations have been applied in the in this industry in the past, for instance, the project that Intel developed with ASU in Vietnam is a good example for us of how we can collaborate and how we can develop similar schemes in Mexico in order to develop the workforce. And we also to mention that some example of the coordinated work and effort between the three governments that chips and science act includes an international force fund for workforce development on which Mexico is applying and willing to to receive finance in order to develop workforce and collaborate with the US and and the Department of State on this regard. I think I can quickly add just one final thing there which is that that's obviously a very important piece of the equation particularly is the US and you know North America is a whole really drives toward you know regaining you know it's advantage in cutting edge chips but I think one of the areas where this you know we're by national cooperation can really help as well. Particularly when you're looking at for many of the main North American end users like the automotive industry is sort of in the legacy chip space so you know semiconductor chips that are not necessarily not the cutting edge but are already sort of in production and are older or older models and I think that, you know, particularly, you know, when you're looking at, you know, DAO chips that are manufactured by Texas instruments by Skyworks by Infineon obviously are going to want to continue making technological progress in those areas but you know it's not necessarily the most high tech most advanced so I think it's it's you know important to note that there are all of these different areas and sort of segments of cooperation where the US and Mexico can really build a you know a strong foundation for this partnership. Well, let's see Isabel any other questions we have. We probably take one or two more from the audience. Okay, awesome. So, and this is anonymous. And it says, there is a lot of talk about near sharing and I like sharing these days, which might make geopolitical sense. But will this trend face fatal resistance in Washington among protectionist politicians who want on your sharing to come to the US and not to North America as a region. We recently had a Republican president who shamed US companies investing in Mexico and demo democratic leaning only unions are also concerned about this. This is a very relevant question Isabel, especially because the face of the success of the US MCA and NAFTA is that the three countries complement each other. The industry is a so complex industry that a single country cannot develop itself, all that process and cannot integrate vertically around all the chain. So, necessarily, they need and we need to specialize everyone on which we have comparative advantages. The US and Canada, in a way, they are specialized and they are more competitive in the processes on which they are intensive in capital and technology, and Mexico can complement that specializing in the labor intensive processes. So we need each other, we need to work together and have a region, a self sufficient in the production of semiconductors and developing the technology on that regard as well. Thank you. I would also add to that. I think our government is very invested in making sure the supply chain is diverse and resilient. You know, part of that indication is from the 500 million which is part of the chip stack, which is all for international investment in fact to help locations, which might need some help with infrastructure, maybe workforce development programs things like that to get started and kind of get up and running. So there's definitely in Washington there's a big desire to make sure that the supply chain is resilient and diverse, and it simply isn't done in the US isn't entirely done in the US. And I think that's what I was just saying, many pieces of the supply chain which are labor intensive are already done in, in East Asia, and in China, so those things are not coming back to the US and they, you know, if possible it would be better to be able to to move those locations to places which are allies with the US and and complement the additional manufacturing that is happening here. In addition, you know the industries facing in every country about 50,000 to 100,000 people shortage is in labor so there's no way that we would be able to kind of increase all the manufacturing and be able to meet those workforce needs in any one location in any case. So I think, you know there's a large desire from many places to be able to make sure that we're working together. In the future when there's shots like the pandemic or other things that could arise that the risk is more spread out. I'll add, I'll add two points on to the great great ones made by Colorado and arena. I think one is that you know the shifting geopolitical context is really, you know, underlying and the pandemic, you know are really underlying a pretty significant shift in all these issues are being discussed in Washington, I think that in combination with the US MCA has really helped to reduce some of the prior political resistance so I think I'm optimistic that we're turning a new page on North American cooperation. I think the other thing which is really critical to note and it's something I'm sure Kevin can speak to is that a lot of this is happening at the subnational level. I think cooperation at the state level here in in state capitals both in the US and Mexico are going to be a key driver of semiconductor cooperation. And that's, that's really, that's really, you know, within this broader framework that's been set up by the federal governments of the US Mexico and Canada that the states are where you're really going to see a lot of the change which also helps, I think, tone down some of the political rhetoric and competition so I mean I'd love to hear your thoughts on that Kevin. Yes, and I will also would like to say something else. When you're sharing and relocation, it's not just a political decision. It's a business decision. So we have to take this into consideration in order to make to the companies and to the private sector attractive ecosystems and competitive conditions to invest and to have profitable projects in in a region. So we are working on this as well in a coordinated way in order to make this happen, not only as a political narrative but it's a business decision that we have to take care of. Thank you. I totally agree. Ultimately, this is a decision that businesses will make and the role that states and universities and other actors play is really critical. I think one of the things that surprised me as I've learned more about the semiconductor industry is how diverse the skill sets are that are required. The great thing about the industry is that employment is available for people of all different skills of all different educational attainment levels and so it really is a win-win on both sides of the border to have more facilities for semiconductors because the types of jobs that are created are high paying jobs, not all of them require college degrees. And it becomes available to a wide range of folks that can take those jobs if they have the skills and that's where ASU and other partners come in working with some of the folks on this call as well to help train up the workforce to take those jobs and fill the gap that Rina talked about, which is present in pretty much every country around the world. It really is a shared challenge. Would that, let's see, Isabella, do you have any short questions? Yeah, we have one. One more really quick. This comes from Fernando Loureiro from Intel and he's asking, what specifically can be done or expected as concrete deliverables by the recent announcement of the North America semiconductor corridor? I hope it's a short one. Yes. Well, the short deliverable and the short answer for that is what the three countries, Mexico, the U.S. and Canada are working in the framework of the NALS, the North American Leaders Summit, and we are envisioning a meeting next April. We try to organize it soon in Phoenix so maybe it can happen there, but the three governments are working in order to deliver soon this project and to develop it in an effective and competitive way. Thank you. Thanks. And I think with that, maybe we'll close out. I know we're already past the top of the hour here and I just want to end by thanking our panelists. Thank you so much for all of your great insights, your analysis, all of your work behind the scenes. And I don't think that the relationship between the United States and Mexico on this particular topic would be anywhere near where it is today without each of your individual efforts. And also thank you to Isabella and our partners who have posted us today. He's been a great conversation. The first of I hope many because as we set some ambitious targets for this year. December is going to be here quickly. I think if we can get the kinds of things we talked about the incentives, the workforce pilot program, a really strong convening with industry, whether in DC or Arizona. That will be really critical for us to move the relationship forward. So with that, thank you all so much and looking forward to continue the conversation. Thank you. Thank you, Karen. Thank you, Rina. Thank you, Davina. Thanks very much. Thank you to the audience for joining us today and until next time, muchas gracias.