When Infineon Technologies talks about its Tijuana operation, the numbers tell a remarkable story: 50 years of continuous manufacturing excellence, 1,900 employees, and a $40 million expansion investment that signals unwavering confidence in the region’s future. But behind these figures lies something more compelling—a blueprint for how global technology companies can leverage Tijuana’s strategic advantages to build world-class operations that compete on quality, cost, and speed.
For decision-makers evaluating nearshoring strategies in the semiconductor and electronics sectors, Infineon’s five-decade commitment to Tijuana offers valuable insights into what makes this border city more than just another manufacturing location.
From International Rectifier to Global Semiconductor Leader
Infineon’s Tijuana story begins in 1973, when International Rectifier established one of the region’s pioneering semiconductor facilities. That 50-year track record—spanning multiple economic cycles, technological shifts, and ownership changes—demonstrates a fundamental truth about Tijuana: companies that invest here stay here.
When Infineon acquired International Rectifier in 2015 for $3 billion, it wasn’t just buying technology and market share. It was gaining a proven manufacturing platform in Tijuana that combined compound semiconductor expertise (particularly in gallium nitride technology) with the operational efficiencies of Mexico’s most advanced manufacturing corridor. The facility handles backend semiconductor operations—assembly, testing, and packaging—positioning Infineon to capitalize on Tijuana’s strengths in labor-intensive, high-precision manufacturing.
This acquisition strategy reflects a broader pattern: when global technology leaders evaluate their manufacturing networks, Tijuana operations consistently prove their worth. Infineon’s decision to maintain and expand rather than consolidate speaks volumes about the facility’s strategic value.
Three Strategic Advantages That Keep Infineon Competitive
1. Location Economics That Actually Matter
Tijuana’s proximity to the U.S. market isn’t just about being close—it’s about operational agility. For Infineon, manufacturing semiconductors less than 20 miles from San Diego means streamlined supply chain integration, reduced transportation costs, and lead times measured in hours instead of weeks. When your customers are in California’s tech corridors or across North America, same-day shipping isn’t a luxury—it’s a competitive requirement.
The facility operates within Tijuana’s established industrial clusters, surrounded by over 600 maquiladoras and a dense network of complementary manufacturers. This ecosystem matters: when you need specialized suppliers, engineering support, or logistics coordination, they’re not across an ocean—they’re across town.
2. Workforce Depth in a Specialized Industry
Semiconductor manufacturing demands precision, technical knowledge, and consistent quality standards. Infineon’s 1,900-person workforce in Tijuana isn’t just large—it’s specialized, with engineers and technicians experienced in power semiconductor production and backend operations.
The facility was planning to add over 200 employees as part of its $40 million expansion, reflecting confidence in Tijuana’s ability to deliver qualified technical talent. This confidence is backed by regional fundamentals: Baja California graduates over 10,000 bilingual engineering students annually from more than 20 accredited universities, and Mexico produces engineers at three times the per capita rate of the United States.
Infineon has implemented self-managed teams at the facility, which leadership notes fits well with local culture and contributes to operational excellence. When your workforce demonstrates what Infineon’s backend operations leadership calls an “outstanding ‘We get it done’ spirit,” you’re not just filling positions—you’re building institutional capability.
3. Cost Structure That Supports Reinvestment
Tijuana’s economic advantages go beyond headline labor costs. Manufacturing wages in the region average $3-5 per hour versus $25+ in the United States, with semi-skilled operators costing approximately $5.30 USD fully burdened per hour for a 48-hour work week, compared to $23 USD for a 40-hour week in the U.S.
But labor is just one component. Industrial real estate runs $0.64-$0.82 per square foot monthly, while the region provides access to a 69kV power grid delivering 12.5 MW of reliable electricity. These operational savings, typically 40-50% lower total manufacturing costs compared to U.S. equivalents, don’t come at the expense of quality. They create margin that technology companies can redeploy into R&D, expansion, or competitive pricing.
The IMMEX Advantage: How Trade Policy Supports Operations
Infineon operates under Mexico’s IMMEX program, which provides substantial competitive advantages for export-oriented manufacturers. Under IMMEX, companies can temporarily import raw materials, machinery, and components duty-free, provided finished products are exported within required timeframes. Key benefits include 0% VAT on temporary imports for manufacturing and export, streamlined customs processing with weekly consolidated declarations, and access to USMCA trade benefits for tariff-free access to North American markets.
For a semiconductor manufacturer sourcing materials globally and serving North American customers, these provisions reduce upfront costs, improve cash flow, and enable competitive pricing. It’s not about tax arbitrage—it’s about removing friction from cross-border operations.
Manufacturing Excellence as Standard Practice
Infineon’s Tijuana facility handles assembly, testing, and packaging of power semiconductors for automotive, aerospace, medical, and industrial applications, maintaining certifications including ISO 9001, IATF16949, AS9100, and ISO 14001. These aren’t just compliance checkboxes—they represent the quality standards that Tijuana’s manufacturing ecosystem has internalized across decades of serving global customers.
The facility has embraced Industry 4.0 principles and automation technologies, with investments in clean room capabilities and advanced production lines as part of expansion projects. When Germany’s Ambassador to Mexico tours your facility to understand contributions to technology and manufacturing excellence, you’re not just operating a plant—you’re showcasing what’s possible in the region.
Why This Case Study Matters for Your Expansion Strategy
Infineon’s 50-year commitment to Tijuana demonstrates three principles that should inform any nearshoring evaluation:
First, proximity creates operational agility. When your manufacturing is hours—not weeks—from your largest market, you can respond to demand shifts, manage inventory differently, and maintain closer customer relationships. For time-sensitive industries like semiconductors, this responsiveness translates directly to competitive advantage.
Second, established ecosystems reduce risk. Infineon benefits from established supplier networks, cross-border logistics infrastructure, and regulatory frameworks that support seamless integration with North American markets. You’re not pioneering—you’re joining a mature manufacturing corridor with proven capabilities.
Third, cost advantages should enable growth. The 40-50% operational savings companies achieve in Tijuana aren’t just about reducing expenses. As demand grows for power semiconductors in electric vehicles, renewable energy, and advanced electronics, Infineon’s Tijuana operation is positioned to capture this growth while maintaining cost competitiveness.
The Bottom Line for Decision-Makers
When evaluating manufacturing locations, look beyond cost comparisons and incentive packages. Infineon’s success in Tijuana demonstrates that the right location provides a platform for sustained competitive advantage, combining market access, workforce capability, operational efficiency, and supply chain integration.
For companies in semiconductors, electronics, aerospace, or medical devices, Tijuana offers something increasingly rare: a manufacturing environment that has proven itself across decades, with the infrastructure, talent, and ecosystem to support sophisticated operations. Infineon’s decision to expand rather than relocate after 50 years says more about Tijuana’s value proposition than any economic development brochure could convey.
The question for foreign investors isn’t whether Tijuana can support advanced manufacturing; Infineon and dozens of other technology leaders have already answered that. The question is whether your expansion strategy includes the location that offers the best combination of cost, capability, and market access in North America.
Interested in learning how Tijuana’s manufacturing ecosystem could support your expansion strategy? The Tijuana EDC provides comprehensive site selection support, workforce analysis, and regulatory guidance for companies evaluating the region. Let’s explore whether Tijuana is the right fit for your operations.
