The Philippine electronics industry is targeting $50 billion in exports this year, 70 percent or $35 billion of which, will come from semiconductors, according to the Semiconductor and Electronics Industries in the Philippines Foundation Inc. (SEIPI).
SEIPI, the organization of electronics companies in the country, issued the export forecast during a panel discussion at the Indo Pacific Business Forum organized by the US Embassy and hosted by US Trade and Development Agency (USTDA) on Thursday.
With the title “Building Resilient Semiconductor Supply Chains for Semiconductors and Critical Minerals in the Indo-Pacific,” SEIPI highlighted the Philippines’s experience in nurturing the growth of the country’s successful semiconductor sector and efforts to strengthen supply chains within the country and across the region.
According to SEIPI, the semiconductor industry accounts for a significant amount of the country’s export revenues.
The organization stressed that even amid the Covid-19 pandemic, except for two months, it was able to resume operations, with support of the government, industry and private sector partners.
SEIPI kick started the year with a trip to the US, together with the Department of Trade and Industry (DTI), to lead the promotion of the country’s top export sector on the global stage.
Dubbed as the “most influential tech event in the world,” the Consumer Electronics Show (CES) 2023 presented wide opportunities for the Philippines to promote its capabilities in the electronics industry and explore partnerships with academic and research institutions.
The tech event featured manufacturers, developers and suppliers of consumer technology hardware, content, technology delivery systems, and more. The CES 2023 includes a conference program where the world’s business leaders and “pioneering” thinkers address the industry’s most relevant issues.
According to SEIPI, Indo Pacific business forum housed smartphones, smart devices, and everything that has electronic components. The organization emphasized that most of the components in smartphones are made in the Philippines.
As automotive electronics become more sophisticated, the organization stressed most of those chips too are made in the Philippines.
SEIPI made these remarks, also noting “they won’t function without being tested.” With this, it said that the Philippines has a testing facility located in Cebu.
It said this dramatizes what the industry means by the importance of being in the global supply chain for semiconductors.
For his part, Trade Secretary Alfredo E. Pascual underscored the importance of the Indo-Pacific Economic Framework (IPEF) in moving the Philippines up the supply chain.
“I think the IPEF will be an important platform for the US. It’s an important platform which the US can really help bring the Philippines to the higher value of the supply chain because under the supply chain pillar of IPEF, there are provisions for training, technical cooperation and capacity-building that could be arranged by our partners,” Pascual said.
Pascual also mentioned that there is a USTDA grant to a local mining company, which contains a feasibility study that can be done on the processing of nickel ore for the production of intermediate nickel products that will eventually be used for battery manufacturing.
The trade chief said the Philippines is “banking heavily” on this demonstration of support in terms of eventually going up “higher in the production of chips,” because Pascual said right now, the country is mainly in outsourced semiconductor assembly and testing (OSAT).
“We’re not yet in the wafer fabrication stage. We’ll need to import silicon but we’re also working on our power sector so we’ll be able to bring renewables that will bring down power cost. We’re talking of the use of nuclear as well that will be an added boost to our power supply,” Pascual said.
“And we have the silica, lower power cost can produce silicon and the next stage is wafer fabrication which is right now almost monopolized by Taiwan. But we can provide the diversification of sources that is needed in the geopolitical situation we’re all in,” the trade chief added.
Image credits: Nonie Reyes