“I am Guatemala's first nanochip,” says the first integrated circuit that uses internal electronics on a nanometric scale, or smaller than a bacterium, as described by Carlos Esquit, director of the Department of Electronic, Mechatronic, and Biomedical Engineering at the Universidad del Valle de Guatemala (UVG). Four years ago, this project began at the university, and now they are about to send the design of this nanochip to a semiconductor factory in Taiwan for manufacturing.

Guatemala does not currently have a semiconductor industry, which is the basis for creating any technological and electronic equipment. However, establishing this industry could change the country's history, says Esquit. “All technology depends on microchips,” explains the director of the electronic engineering department, adding that this first nanochip will be the foundation for a future of electronics and semiconductors.

In 2022, Guatemala's manufacturing industry contributed more than US$13 billion to the country's GDP, according to a report published by Guatemala's National Competitiveness Program (Pronacom). In addition, the document indicates that during the same year, US$157 million in foreign direct investment was received from this segment, mainly from the United States, Panama, South Korea, Mexico, and Spain.

Byron Méndez, general manager of Campus Tecnológico (CampusTec), explains that over time, there has been a growing trend toward smaller technology. Méndez asserts that the world's population has now become accustomed to digitalization and that the only way for Guatemalans to join in the production of technologies is to produce everything locally. “The time it takes to have things made and shipped can affect business,” argued Méndez, who pointed out that semiconductor designs are currently sent to Asia for manufacturing.

The “big leagues” of the industry

The United States is one of the countries that is aware of how semiconductors are now an essential part of the manufacturing of many products we use, said Wendy Mena of Invest Guatemala. Based on this, Mena asserts that the United States seeks to reduce its dependence on semiconductor manufacturing in Asia, and for this reason, it launched the “Chip and Science Act” in 2022, an initiative that will allocate more than US$280 billion to promote research and manufacturing of this technology both in the United States and in neighboring countries. According to Mena, this demonstrates the United States' interest in relocating companies, promoting nearshoring, and strengthening value chains.

Mena emphasizes that Guatemala has not requested to join this initiative, nor has it been invited to do so. However, the country could become involved in this semiconductor value chain and seek to join the agreement, which could create new jobs and improve the country's position in the technology sector. To this end, Mena asserts that a regulatory framework, human capital, and well-designed logistics are necessary.

Lucía Nitch, director of knowledge generation and transmission at the National Secretariat for Science and Technology (Senacyt), says that these talks should be held by the Ministry of Foreign Affairs (Minex) at the US embassy in the country, together with experts from ministries such as Energy and Mines, Finance, and Economy.

Guatemala: technological possibilities

In July 2023, the US government incorporated Costa Rica and Panama into the US Department of State International Technology Security Innovation Fund (ITSI Fund), which includes an assessment of the ecosystem required for semiconductor manufacturing.

This assessment includes a review of the regulatory framework, workforce, and infrastructure. Based on this, the United States aims to allocate resources to examine the strengths that these Central American countries can offer and carry out the manufacturing, assembly, testing, or packaging of semiconductors.

According to Mena, Guatemala could approach the United States and request a place in this fund, as Panama and Costa Rica did, demonstrating what the country has to offer in this technology industry. “Guatemala needs to seek to foster this conversation with the United States to see where it can go in the semiconductor value chain,” argues Mena.

Mena mentions that Guatemala, like Panama, does not have experience or local suppliers for the manufacture or assembly of semiconductors, and therefore, the country could start in this value chain at the product testing and packaging stage. However, the executive emphasizes that an analysis of the country's capacity must be carried out and, based on this; determine whether Guatemalans can venture into semiconductor assembly.

According to Nitch, Guatemala can provide the metals needed to manufacture these semiconductors. According to the expert, in 2020, when demand for this product skyrocketed, the metals used in its production began to decline. However, Nitch explains that Guatemala has metals in its volcanic soils, which would be “a very good contribution to the technology industry.”

Despite these materials that could be extracted from Guatemalan soils, Nitch explains that research on this topic is limited, and although some information has been compiled by the Ministry of Energy and Mines and universities, further research is needed to share it with the country's various industries.

Méndez emphasizes that foreign support is almost always needed for innovation projects. “There has to be a lot of investment, not only from foreign funds, but also from Guatemala's private sector,” says the CampusTec manager, adding that from the government's point of view, funds are often received late.

Creating the factories

Méndez explains that currently, Tec projects involve designing semiconductor models and sending them to Asia for manufacturing, which increases the cost of products manufactured in Guatemala. “What we need is the machine,” emphasizes Méndez, who assures that the country already knows how to design the products; it just needs the infrastructure to manufacture them.

Mena adds that 50% of the value of semiconductors lies in software design—which encompasses programming and what the device will do—which is already being done in Guatemala. What is needed at this point are laboratories and labor, he said. Once the hardware, which is the physical creation of the technology, has been built, more international investment could be attracted, Mena points out.

In addition to knowledge, Nitch adds that the country already has the raw materials, which is one of the main assets it can offer the industry. However, a constant research environment and machinery are needed to filter the metals required from the soil. In addition to this, Nitch asserts that millions of dollars are needed to set up a special laboratory and carry out the necessary studies to define the role of Guatemalan metals in the semiconductor value chain. “Initial research can be done with thousands of quetzals, but to build an industry, a million-dollar investment is needed,” Nitch concludes.

“The projection is that the United States needs more than 2 million square meters of space to manufacture semiconductors,” says Mena, who believes this would be a good opportunity for Guatemala to develop an ecosystem within this value chain.

Likewise, given the lack of machinery, Esquit suggests that Guatemala could start with design issues and later acquire a plant. This is similar to Costa Rica, where Intel, a US technology company, will invest approximately US$1.2 billion over the next two years, according to the company's official website. The website also shows that Intel has created jobs for 3,300 direct Costa Rican employees and more than 500 contractors, in addition to creating 17,000 square meters of laboratories for software and hardware operations.

Training seedbeds

Méndez asserts that, at present, there are not enough people who can perform jobs such as semiconductor manufacturing. “Currently, we don't even have enough people for programming,” says the CampusTec manager, adding that most Guatemalan programmers tend to leave for companies abroad. To address this, he proposes the creation of training centers to educate them and prevent them from leaving to work for companies in other countries.

For Mena, it is extremely important to think about human capital, and she explains that places such as the Technical Institute for Training and Productivity (Intecap) are already teaching people how to program processors. For the executive, the main focus for this industry should be human talent, and in order to train Guatemalans, funds are needed to develop the areas that are required.

At the academic level, Esquit indicates that more programs offering this type of technology are needed, along with ways to encourage young people to pursue these innovative careers. “With widespread scholarships for electronic engineering, in five years we could have a huge pool of talent, attracting the interest and investment of companies like Intel in the country,” he emphasizes.

Méndez assures that CampusTec is in talks with various universities outside the country and will seek to offer scholarships starting next year so that Guatemalans can train in a technological specialization in approximately 10 to 12 months.

Senacyt also has funds available so that universities or other entities interested in researching these topics can apply for and obtain support for research projects with a maximum of Q500,000, for both basic science and applied science.

Despite its limited experience in semiconductor manufacturing, Guatemala has other conditions that may be of interest to countries such as the United States, says Mena. Among these, he mentions the country's proximity to the US and the commercial trust between the two countries. Likewise, the document published by Pronacom lists macroeconomic stability, demographic dividend, and preferential access conditions as competitive advantages for the country.

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