Mexico and the United States plan to take advantage of the Biden administration’s massive investment in semiconductor production to push the integration of their supply chains and cooperate on expanding the production of electric vehicles through Mexico‘s nationalised lithium industry, officials from both countries said Monday 

Both efforts seek to eat into Asia’s advantage in semiconductors and batteries needed for electric vehicles and promote North American production. 

“Major elements of the semiconductor supply chains are already well established in Mexico, with U.S. based companies like Intel and Skyworks conducting research and development, design, assembly and test manufacturing in parts of Mexico,” said U.S. Secretary Antony Blinken. 

Blinken and U.S. Commerce Secretary Gina Raimundo had spoken earlier in the day with Mexico President Andrés Manuel López Obrador about the opportunities for Mexico to take advantage of recently passed U.S. legislation that would provide $28 billion in incentives for semiconductor production, $10 billion for new manufacturing of chips and $11 billion for research and development. 

“This means more jobs for Mexico, more integration,” said Mexico Foreign Affairs Secretary Marcelo Ebrard.  

“We think Mexico could grow twice as much with what was proposed to Mexico today and this means we can reduce poverty even faster in our country and that the infrastructure of Mexico can grow faster.” 

This new venture is a big opening for Mexico’s economy. The global shortage of semiconductors has slashed into production of autos, household appliances and other goods, fueling high inflation and therefore the partnership between the two countries a huge step in the market.