Sanmina Corporation (SANM) faces a challenging trade environment in 2026 as new Mexican legislative reforms introduce steep import duties on non-FTA components. Effective January 1, 2026, Mexico has implemented tariffs ranging from 5% to 50% on over 1,400 product categories, specifically targeting electronics inputs from countries like China and India that lack free trade agreements with Mexico.
Sanmina’s extensive manufacturing footprint in Mexico, which serves as a critical “near-shoring” hub for U.S. customers, is particularly vulnerable to the USMCA “Lesser of the Two” rule. Under this regulation, Maquiladora operations may no longer be exempt from paying Mexican import duties if the final product is exported to a country with lower prevailing duties. For Sanmina, this means that Chinese-sourced components used in AI servers assembled in Mexico could face immediate cost spikes of up to 35%, directly impacting the company’s ability to maintain its target operating margin of 5% to 6%.
The company acknowledged these risks in its latest regulatory filings, citing the geopolitical landscape as a factor incorporated into its wider-than-usual guidance range. As the U.S. and Mexico tighten North American supply chains to reduce reliance on Asian suppliers, Sanmina must balance the high cost of regionalizing its supply chain against the aggressive growth targets set for its new AI infrastructure segment.
