The United States reaffirms the Philippines' potential as a downstream manufacturing hub for silicon wafers, an integral component of producing semiconductor materials such as microchips used in gadgets and other equipment.

In a roundtable discussion with selected members of the media on Tuesday, US Assistant Secretary of State for the Bureau of Economic and Business Affairs Ramin Toloui said the US government treats the Philippines as a significant market for semiconductors after the US lawmakers passed into law the CHIPS and Science Act in 2022, allocating nearly $53 billion to rebuild its domestic chip supply chain and invest in future research and development.

Of the said total, $39 billion is dedicated to initiatives that boost semiconductor manufacturing, particularly the production of silicon wafers in the US.

“Part of that funding is also in deepening international partnerships. In particular, there is a need for additional manufacturing and the Philippines has been a significant player in the testing and packaging component or the downstream manufacturing of semiconductors,” he said.

Toloui stressed that with semiconductors demand poised to continue to grow, as microchips will be also used in medical devices, and automobiles that are ubiquitous to the daily lives of every citizen in the world, the demand for downstream manufacturing is also seen to tremendously increase.

“We want to have a resilient and substantial capacity for that because we don’t want interruptions in the semiconductor supply chain just like what happened during Covid-19. The Philippines has the potential to play an incredibly important role in the global semiconductor supply chain. We have selected the Philippines as one of the five countries to partner with in our International Technology Security and Innovation (ITSI) Fund,” he explained.

The Philippines, under the CHIPS Act, is set to benefit from the $500 million ITSI Fund for five years, or $100 million for each year.

The CHIPS Act supports the diversification of the supply chain of US companies with rich natural resources and is a strong ally of the US government.