Chipmakers “choosing” Phl, pulling out from China

Two multinational companies from Japan and the United States are choosing the Philippines to be their next country destination for operation, pulling out from China and partnering with the EMS Group.

EMS Group — a Biñan, Laguna-based electronic, semiconductor, and medical subcontracting group — offers technology and manufacturing solutions.

Perry Ferrer, the chairperson and CEO of EMS Group, said that although the deal for the transfer is confirmed and is already in a dry run phase, he cannot divulge the names of the companies as it might disrupt their current operation and production in China.

“We are looking at a total package of investment of around $800 million. It's for the semiconductor. Part of that $800 million is already here, quietly. It's already running, and the full-rate production will happen probably in 2026, as they are still testing the waters in the Philippines," Ferrer told reporters on Friday in a roundtable interview at Laguna Technopark, Inc. SEZ, Biñan, a manufacturing complex being operated by the Philippine Economic Zone Authority.

"If we complete the acquisition of a larger factory in 2025 somewhere in the Batangas area, then 2026 will be their full production,” he revealed.

He said to date, EMS runs one of the two company's factories as proof of concept and to test the high-quality workmanship of Filipino workers.

“Part of the test is the communication aspect if workers can converse technically and administratively in English, particularly to the business, technology or technical discussion, which we are very confident of,” he said.

He said with the upcoming investments, around 2,500 to 3,000 workforce will be produced by 2026.

EMS, as part of the deal, will produce power-integrated circuits, which are being used in automotive, particularly in electric vehicles.

“They are here because they want to validate what we have been selling all along in the past year about the improved business climate in the Philippines and the ease of doing business, which is the top priority of the current administration,” he said.

However, he admitted that there are still areas of improvement when it comes to the ease of doing business.

During his Manila visit this week, 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 player for semiconductors, benefiting the CHIPS and Science Act in 2022 that was passed by US lawmakers, 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 was 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,” Toloui said.

The EMS Group is a complete electronic, semiconductor, and medical subcontracting group that offers technology and manufacturing solutions.

Backed by its 20-year history in the field and the presence of the most credible industry experts, EMS group employs quality-driven and innovative strategies to achieve the quality, cost, and productivity targets of the customer, committed to keeping the Philippines' edge in electronics and semiconductor manufacturing.

As of March 2024, the EMS Group has more than 10,400 employees, composed of support groups, engineering and technical, and with more than 9,600 in the production segment.