But the nation and the industry are forming a jolting relationship as Mexico advances from mere appliance circuits to complicated multi-layered embedded chip and transistor-capacitor placement for computers.

This transition is requiring machine-skilled workers rather than merely labor-intensive assembly workers.

Electronics companies and their suppliers are pouring into Mexico.

They used to go almost entirely to Guadalajara -- the Silicon Valley of Mexico -- and Tijuana.

But now the electronics phenomenon is spreading across almost all of the nation. Numbers help tell the story.

In all of Mexico, electronics manufacturing is No. 1 among maquiladoras, with 34 percent. Automobile equipment and components are a distant second with 21 percent, and textiles/apparel is third at 19 percent, according to the maquiladora database maintained by the El Paso, Texas, purchasing-market research firm Solunet.

The Rio Grande states of Coahuila, Nuevo Leon and Tamaulipas as a group show electronics second at 33 percent, sneaking up on the long predominant industry of textiles.

And then there's this astonishing finding from Solunet: 98 percent of televisions sold in North America are made by Mexican maquiladoras.

Some history helps show how electronics has reached this point, the factors behind the evolution, and what the future holds.

Electronics manufacturing in Mexico actually did not start in Guadalajara or Tijuana.

In 1967, Motorola entered Nogales in Sonora along the Arizona border, and RCA started up a plant in Ciudad Juarez across from El Paso, recalled Gale Thompson, vice president of operations for Arizona-based Offshore International, a company providing a myriad of services for companies placing facilities in Mexico.

General Instruments also came to Nogales soon afterward. By 1986, Guadalajara began filling up with plants for IBM, General Instruments, Hewlett Packard and Sperry Rand.

Although maquiladoras were springing up, many Mexican-owned electronics factories arose to make products for Mexicans only, protected from foreign competition, said Fernando Garcia, who runs Monterrey-based Consorcio Industrial de Exportacion, a group of industrial parks.

"Duties were high then. Companies were started to supply within Mexico to be close to where the Mexico market was," Garcia said. "People thought Guadalajara was the only place to be."

Guadalajara was where the labor force was developing, while Tijuana became home to much of Mexico's niche for television manufacturing. At that time, production centered on circuit boards, items that could be stamped out at 10,000 per hour along labor-intensive assembly lines.

But as Mexico went through the transformation to an exporting nation, the locations began to spread. Mexico joined the world-trading arena of the General Agreement on Tariffs and Trade in 1986, and year by year the Mexico economy slowly opened.

The North American Free Trade Agreement in 1994 further institutionalized the open Mexican economy.

By then new technologies appeared on the scene. Now nearly all of Mexico appears to be open game for electronics manufacturing, including surface-mounting, where machines manned by skilled operators place transistors and capacitors onto double-sided and multi-layered computer circuit boards.

Informed sources say telecommunications giant Nokia, after having established operations in Reynosa in Tamaulipas, across from McAllen, Texas, is on the verge of expanding with a large presence in Monterrey.

A Toronto, Canada, company, Celestica, has purchased operations from the U.S. company, Lucent Technologies, in Monterrey.

"More companies are coming to the area," Fernandez said. "It is more important to be closer to the border. It's a good place to be."

"Monterrey will emerge as the next electronics hub in Mexico," predicted Thompson. "It is the second-largest industrial city after Mexico City, with steel, glass and plastics. Guadalajara is the third largest.

"Northern Telecom, General Electric and Japanese companies are going to Monterrey because of the availability of skilled labor, education and the proximity to the United States," Thompson said. "In the next 10 years, Monterrey will rival Guadalajara."

"Elcoteq, a Finnish company that is an electronics supplier and provider, is constructing 80,000 square feet in Monterrey," Sullivan said. "In Reynosa, Panasonic last year opened a new plant to add to another built prior to that."

Expanding to all points
ProLogis is expanding its warehousing and manufacturing leasing operations on a broad scale in Mexico at the same time it expands in Europe.

"That is not to say places like Guadalajara do not continue to grow. It's just that there is a great deal of interest in expanding operations to other points in Mexico to capitalize upon the companies that are already there and to capitalize upon perhaps a better distribution network."

The Tex-Mex factor figures strongly into the electronics expansion into north Mexico.

Offshore International's Thompson confirms the trend.

"We know that General Electric is telling its vendors, åI want you in Mexico. I want you to be a just-in-time supplier to take advantage of lower costs in Mexico,'" Thompson said. "GE wants 20 percent of its products to come from Mexico and wants a 5 percent reduction of costs per year, That's good for us. We have companies contacting us saying, åWe have to go to Mexico. Be our coach.'"

Luring business from Asia
Much the same is going on in the northern state of Sonora, where the economic development council aggressively is seeking electronics manufacturing and has a track record to show.

Maxi Switch Mexico is a set of maquiladoras in Sonora operated by the Taiwanese parent of Slititek-Liteon Group. The factories are in Cananea and Caborca, Sonora, with the newest one in the Sonora capital of Hermosillo.

"We make various electronics but mainly computer keyboards," said Maxi Switch President Syed Hasan. "We supply seven of the 10 top makers of computers. We also make smart telephones, the ones with liquid crystal displays, and video games and cartridges."

Maxi Switch has been in Sonora for 15 years.

"We came because it is competitive with the Asian labor market and has little in the way of freight costs," Hasan said. "We have proximity to the United States. We are close to our customers and can provide them flexibility. A few years ago we made a commitment to Hermosillo. We purchased the buildings and asked our Asian suppliers to set up in Hermosillo, or they would lose the business. We helped them. The Sonora state government helped them. The result is a vendor park with plants for sheet metal, cables, mylar circuits and rubber moldings.

"We are still in the expansion mode. We want to move as much as we can handle into Mexico from the Far East."

The state of Chihuahua has its own story.

"Acer Computers is opening three buildings," said Queta Barrett, marketing director of American Industries with industrial parks in Ciudad Juarez and Ciudad Chihuahua.

"Delphi Technology is an auto electronic operation (a General Motors subsidiary) in Juarez with the highest technology in the world and has had a recent expansion. Sumitomo has operations in both cities making harnesses.

"In Chihuahua City, Lockheed makes F-16 harnesses. When people come to see us, we like to take them to that shelter. It is outstanding, and it expanded recently.

"Juarez is the harness center of the world," Barrett added. "We've had experience with this going back to 1976. That ensures a high-skilled labor force. So they keep coming."

Training south of the border

"Electronics is not as much labor intensive," noted Marco Ramon, president of business development for Parque Industriales Amistad, which operates eight industrial parks throughout Coahuila.

"We have technical schools and universities to help with skilled labor and training. The local universities and technical schools provide space and teachers.

"Companies provide some of the machinery the workers will be using," Ramon said. "The training programs are designed for the company itself, but it is funded by the government.

"The average worker has at least a 10th grade education. Coahuila has among the best education levels in the republic."

Many states in Mexico offer almost the same incentives, especially in training programs. One region does not have a giant advantage over the other, observed Richard Kean, special projects director for Offshore International.

Worker education levels and the ability to learn will please U.S. companies having difficulty finding competent workers in this era of full employment in many sections of the United States, Kean said.

"The Mexican worker is reliable, productive and shows up every day," Kean said. "They are better educated as a matter of fact (than many marginal U.S. workers without jobs in the United States). They have a high literacy rate. They take care of their children in Mexico."

David Hendricks is a business columnist for the San Antonio Express-News.