US firms lured to invest in Phl semiconductor industry

Trade Secretary Alfredo Pascual has recently faced American firms to entice them in pouring in investments to the country's semiconductor industry, the Philippines' second largest source of exports.

In a roundtable discussion on Thursday (Manila time) in San Francisco at the sidelines of the Asia-Pacific Economic Cooperation Summit 2023, the Trade chief underscored the Philippines' strong economic growth coupled with the country's comparative advantages including a huge pool of young talent, a competitive business environment, strategic market access, and robust government support.

"Within the semiconductor sector, the United States, particularly through partnerships and support from the Semiconductor Industry Association (SIA) and the Semiconductor Equipment and Materials International, stands out as a pivotal ally. Our two countries' collaboration runs deep, reflecting a strong alignment across various levels, where the previously mentioned advantages seamlessly complement the advanced technologies of your country. Meanwhile, at the policy level, both parties are actively engaged in the Indo-Pacific Regional and Bilateral Policy Framework negotiations," he told American firm owners.

Also, Pascual added that the Department is fostering close collaboration with local industry associations, such as the Semiconductor and Electronics Industries in the Philippines Foundation, Inc. or SEIPI, and emphasized the country's robust electronics industry which served as a primary driver for the growth of the export sector, contributing a substantial 62.27 percent to the total exports.

On the other hand, he reported that the country's merchandise exports soared to approximately $78 billion, a substantial achievement positioning the Philippines within the top 10 global suppliers for nearly 200 products and among the top 20 suppliers for 500 diverse products.

He outlined the strength of the Philippines' service export, particularly in the manufacturing services on physical inputs owned by others (MSPOI), which recorded $41 billion in 2022 placing the country as the second-largest exporter in the ASEAN region.

He also added that the country is aspiring to grow its participation in the US semiconductor value chain in relation to the CHIPS Act and with the Executive Order of President Biden to work with American allies and partners to strengthen the collective supply chain resilience.

"We aspire to go beyond our current activities in assembly, packaging, and test of semiconductors, into higher value segments of the value chain such as in chip design and putting up a lab-scale wafer fabrication facility," he said.

The DTI chief stressed that in strengthening the semiconductor sector in the Philippines, the SIA and SEMI would be pivotal allies for strong collaboration to achieve our goals and firm up further the relations of both the PH and the US.

During the meeting, the DTI Secretary also highlighted the Department's concerted efforts to expand the local industry through various programs and initiatives. These include (1) establishment of crucial support facilities, (2) enhancement of human capital through capacity-building, (3) streamlining of business processes for ease of operation, (4) active industry promotion, and (5) dedicated policy advocacy and development. He added that with global semiconductor companies looking for sites that will support their carbon neutrality goals, the PH would be an ideal site with our vast renewable energy potential to generate green energy for semiconductor operations. The Government will provide support to companies that will set up their own RE projects to power their operations.

With the US consistently ranking as one of the country's top investors, Secretary Pascual enjoined private firms to consider investing in the semiconductor industry and said, "As we navigate the dynamic landscape of the semiconductor industry, I invite you to explore the boundless opportunities within the Philippines. Join us in harnessing the potential of our skilled workforce, competitive business ecosystem, and supportive policies. Together, let's pave the way for unprecedented achievements in the semiconductor space. When success comes to mind, envision the Philippines and Make It Happen in the Philippines."