GLOBAL semiconductor players are looking at tapping the Philippine semiconductor industry to deepen the country’s role in the global semiconductor supply chain and to support US firms in the endeavors under the Creating Helpful Incentives to Produce Semiconductors (CHIPS) Act, according to the Board of Investments (BOI).
“While the CHIPS Act aims to increase the capacity of the US semiconductor industry, we recognize that we cannot do it all in the US. And that’s where countries like the Philippines have an opportunity,” Semiconductor Industry Association (SIA) President John Neuffer said.
Neuffer added that the CHIPS Act encourages manufacturing in America, but rather than reshoring all manufacturing activities, it is more of “rebalancing the supply chain.”
The BOI said in a news statement on Wednesday that “while the CHIPS Act incentivizes the manufacturing of microchips domestically in the US, there remain several segments in the semiconductor supply chain such as assembly, testing, and packing,which are more cost effectively conducted outside of the US.”
According to its website, SIA represents 99 percent of the United States’s semiconductor industry by revenue and two-thirds of non-US chip firms. BOI said many of SIA’s member firms have “significant” investments in the Philippines including Analog Devices, Onsemi, and Texas Instruments, among others.
For his part, BOI Managing Head and Trade Undersecretary Ceferino S. Rodolfo expressed appreciation for the US semiconductor industry group’s confidence in the Philippines’s investments prospects.
“We thank our US partners for the opportunities that you have presented, and for recognizing the Philippines as one of your key partners. We, in the Philippine government, stand with the local semiconductor industry in promoting partnerships and enhancing local capacities and competencies in semiconductor manufacturing to deepen the country’s role in the global semiconductor supply chain and be able to further support US companies in its endeavors under the CHIPS Act,” Rodolfo said.
On January 16, SIA, led by its President and CEO John Neuffer and its Vice President for Global Policy Jimmy Goodrich, made a courtesy call on the BOI managing head, said the investment promotion agency.
Apart from the courtesy call, the BOI arranged round-table meetings for SIA to meet with Philippine government agencies and trade groups such as the Department of Science and Technology (DOST), National Economic and Development Authority (Neda), Department of Information and Communications Technology (DICT), Strategic Trade Management Office (STMO), IC Design companies, and the Semiconductor and Electronics Industries in the Philippines Foundation Inc. (SEIPI).
According to the investment promotion agency, SIA and the government agencies exchanged views on the impacts of recent US export controls, semiconductor supply chain security and resilience initiatives, as well as potential opportunities for US-Philippines semiconductor cooperation, especially in R&D and workforce development, with the allotted $500 million funding under the CHIPS Act.
Opportunities in (integrated circuit) IC design and software development in the Philippines were also discussed with the IC design private sector representatives.
For DOST’s part, Philippine Council for Industry, Energy, and Emerging Technology Research and Development Executive Director Dr. Enrico C. Paringit presented the government’s initiatives to strengthen industry capabilities. He said the agency is ready to work with its US counterparts to continue to develop the country’s capabilities and enhance the US semiconductor global supply chain.
The BOI said the local semiconductor industry, as part of the electronics industry, is a top contributor to the country’s manufacturing Gross Value Added (GVA), accounting for 7 percent of the total manufacturing GVA for first quarter to third quarter of 2022, and employs over 3 million direct and indirect workers.
As of November 2022 year-to-date, cumulative electronics exports reached $45.63 billion, or 62.36 percent of the total Philippine exports, added BOI.