Data Centers in Nogales
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Nogales – Strategic U.S. Border Colocation
Nogales serves as a critical colocation market for businesses requiring low-latency access to manufacturing, logistics, and cross-border trade operations between Mexico and the United States. Its strategic position on the Arizona border provides a unique gateway for workloads supporting supply chain management and international commerce, ensuring reliable performance for essential applications.
Nogales: At A Glance
| Factor | Rating / Data | Notes |
|---|---|---|
| Global Connectivity Grade | B | Solid connectivity, primarily geared towards cross-border routes and regional access. |
| Direct Cloud On-Ramps | 0 – as of September 2025 | Nearest hubs are in Phoenix and Querétaro; access via private network extensions. |
| Power Cost | MXN $1.50 - $2.20/kWh | Industrial rates are competitive, supporting manufacturing and data center operations. |
| Disaster Risk | Moderate (4.9/10) | Primary risks include earthquake and river flooding; overall profile is manageable. |
| Tax Incentives | Yes | Includes a development bank credit package for specific data center projects. |
| Sales Tax | 16% VAT | Standard national rate applied to goods and services, as of September 2025. |
Network & Connectivity Ecosystem
Carrier Density & Carrier Neutrality: Nogales supports a focused but capable connectivity ecosystem with over 15 carriers present, as of September 2025. The market is defined by strong cross-border fiber routes connecting to major U.S. and Mexican networks, with carrier-neutral facilities available for interconnection.
Direct Cloud On-Ramps: There are no direct public cloud on-ramps within Nogales, as of September 2025. Businesses connect to cloud providers by utilizing private network extensions or dedicated circuits to major access hubs like Phoenix, Arizona, or Querétaro, Mexico. This allows secure, high-performance access to all major cloud platforms.
Internet Exchange Points (IXPs): Public peering is not a primary feature of this market. Most network interconnection occurs through private peering arrangements within local data centers or is routed through major national exchange points in Mexico City or U.S. hubs like Phoenix and Dallas.
Bare Metal: Bare metal server options are available, typically provided by regional specialists or international providers capable of deploying equipment in the area. Services from providers like Hivelocity or phoenixNAP can be leveraged to establish dedicated compute infrastructure.
Power Analysis
Average Cost Of Power: Industrial power costs in the region range from approximately MXN $1.50 to $2.20 per kWh, as of September 2025. These competitive rates make the market financially attractive for compute-intensive operations common in manufacturing and logistics support. The national energy mix consists of approximately 69% fossil fuels, 26% renewables, and 5% nuclear power.
Power Grid Reliability: The power grid supporting the primary industrial and commercial zones in Nogales is engineered for the demands of cross-border manufacturing. Infrastructure is generally reliable, with data centers in the area built to standard N+1 redundancy levels to ensure consistent uptime.
Market Access, Business & Tax Climate
Proximity To Key Business Districts: Data centers in Nogales are strategically located to serve the dense concentration of maquiladoras (manufacturing plants) and logistics companies that define the city's economy. This proximity provides low-latency connectivity essential for real-time inventory management, industrial automation, and cross-border customs processing.
Regional Market Reach: Nogales provides effective digital service delivery to northern Sonora in Mexico and southern Arizona in the U.S. It acts as a crucial digital border crossing, enabling companies to serve distinct legal and commercial jurisdictions from a single, strategically positioned infrastructure hub.
Tax Advantage For Data Centers: Mexico offers financial incentives that can benefit data center operators and their customers. A specific development bank credit package has been established to support the construction and operation of data center facilities, helping to reduce the overall cost of digital infrastructure.
Natural Disaster Risk
Nogales has a moderate natural disaster risk profile, with an INFORM Risk score of 4.9 out of 10, as of September 2025. While the overall risk is manageable, operators should engineer facilities to withstand specific regional threats.
The most significant natural hazards identified for the area include:
- Earthquake: 8.2/10
- River Flood: 7.9/10
- Tropical Cyclone: 7.1/10
- Drought: 3.0/10
