A MANUFACTURING industry leader raised concerns over the continued lockdown measures imposed amid the pandemic as these have affected the semiconductor sector, which aims to grow by 7 percent this year.
During a general membership meeting on Thursday, Semiconductor and Electronics Industries in the Philippines Foundation Inc. (Seipi) Chairman Glenn Everett lamented that the mobility restrictions have been hampering the industry’s operation.
Manufacturing hubs Metro Manila and Laguna are under modified enhanced community quarantine until the end of August. Based on the guidelines from the Department of Trade and Industry, some related production segments of the semiconductor industry are mandated to limit capacity to 50 percent.
“There’s great demand but the strict lockdowns have caused impacts that reduced the potential,” he said. “Hopefully, these conditions improve, restrictions will be reduced; and we will be able to live up to a larger potential.”
Seipi, however, has maintained its growth forecast of 7 percent for the year.
“Given all the global and local trends and conditions, the Board of Trustees evaluated the condition of semiconductor and electronics industry here in the Philippines…and the consensus opinion is that it will be about 7 percent for the year,” he said.
Everett noted that worldwide sales of semiconductors improved by 21.7 percent to $41.8 billion in April from $34.4 billion year-on-year; $11.65 billion came from Asia Pacific and other regions.
For the local industry, the electronics industry remains to be the top export contributor with $4.03 billion in revenues last June, which showed an 8.9-percent month-on-month growth. The major markets for the Philippine electronics sector include Hong Kong, the United States, China, Singapore, Japan, Korea, Taiwan, Germany and Netherlands.
Seipi President Danilo Lachica said that the industry has been focusing its efforts on decreasing dependence to imports to boost production.
“What we’re doing here to try to minimize this import of materials will be to continue working on our parts localization program,” he said.
In relation to this, Lachica said they are looking forward to opening a microelectronics wafer fab lab in a few years amid the shortage of the manufacturing input.
“To protect the intellectual property, shorten the process lead time and hopefully reduce the cost, we have…to put together a lab-scale wafer fab. And hopefully, in a couple of years, we can build that to support the IC [integrated circuit] design industry for prototyping needs,” he said.
Further support
John Ocampo, cofounder and president of California-based semiconductor firm Gaas Labs LLC, said that the local industry requires better educational approach and more financial support if it wants to maximize participation in the global value chain.
“We are not graduating enough engineers. Maybe, partly, it’s the perception that it is a tough major and maybe what causes that is the lack of emphasis on STEM [science, technology, engineering and mathematics] early on in their education,” Ocampo said.
“Before we can even start thinking about offering low-hanging fruits like R&D [research and development] credits, tax holidays, we need to fix the system,” he said, stressing there not enough incentives for engineers.
In addition, he cited a need to develop an ecosystem wherein start-ups and small firms will be able to thrive.
Ocampo highlighted the necessity of having more incubators, local angel investors and venture capitalists, research grants and partnerships with top engineering schools.
He cited the following as main growth driver for the semiconductor industry: artificial intelligence, machine learning, Internet of things, cloud technology and fifth-generation technology.
Image courtesy of Nonoy Lacza
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