ICT industry in Mexico will slow down in 2023

The information and communications technology (ICT) market in Mexico will register a growth of 5.8% during 2023, according to an estimate by the Select consultancy, which foresees that public cloud services will contribute most of this growth.

The World Bank projected growth of 1.5% for the Mexican economy in 2023, so the technology sector will grow three times more than Mexico’s GDP.

The value of the ICT market will reach a total value of 489,000 million pesos or around 24,000 million dollars in 2023. Public cloud services will be the fastest growing, with 27%, followed by IT services, with 7.5%, hardware, with 3.1%, connectivity services, 3%, and software, with 1.7 percent.

semiconductors

The ICT market is constrained by the macroeconomic situation, which includes aggressive inflation in most of the world’s countries, an increase in interest rates by central banks and the war between Russia and Ukraine.

To this is added the under-exercise in which the government of President Andrés Manuel López Obrador has incurred, which reaches 60% with respect to the budget approved for this item in the PEF 2022. The government of President Andrés Manuel López Obrador has spent just 12,903 million of pesos of the 32,334 million contemplated for this year, at least until November, despite the fact that government spending supports up to 15% of the market.

The affectations in the supply chains maintain their role among the limitations of the Mexican technology market. In July, Jesús Palomino, general director of Intel’s validation and design center in Mexico, assured that the shortage of chips will be fully resolved by mid-2023.

The American integrated circuit company signed an agreement in April 2022 to strengthen the semiconductor supply chain in Mexico, through the training of Mexican students in technological matters.

In August, Diego Garza, Intel’s director of Channels and Alliances in Mexico, said that the US$52 billion in subsidies that will be given to the integrated circuit industry by the United States government will generate collateral investments in Mexico, which include the talent generation and job creation.

data centers

The growth in the use of public cloud and the obligation that various sectors have to locate the data of their clients in Mexico will make this sector the fastest growing in the technology industry during 2023, as it has been doing in recent years.

The growth in demand for information storage and processing capacity in Mexico, caused mainly by the effects of the Covid-19 pandemic, has caused an exponential increase in the installation of data centers, especially in the state of Querétaro. , which has become the data center hub in the country.

In July, the US technology company Oracle announced the construction of its first data center region in Mexico in the state of Querétaro, as did Google, which also announced the installation of a region of Google Cloud, its cloud service, in the country. These companies join others such as Microsoft, Amazon or the Brazilian Odata that have also come to settle in the Mexican Bajío region.

Despite the global economic environment and the austerity of the Mexican government, the technology sector will grow three times more than the Mexican economy in 2023.

rodrigo.riquelme@eleconomista.mx