Despite logistical challenges and regulatory roadblocks, the domestic electronics industry maintained its 10 percent growth target this year.
Dan Lachica, president of the Semiconductor and Electronics Industries in the Philippines Foundation, Inc. (SEIPI), said as he reported of robust exports’ growth in the first quarter this year during its virtual Annual General Membership Meeting (AGMM) on Thursday, May 26.
As of March 2022, Lachica reported that the cumulative electronics exports reached $ 11.79 billion, a 9.3 percent increase from last year’s figures. This was 60.70 percent of the $19.42 billion total Philippine commodity exports, thus retaining its position as the country’s top commodity exporter, he pointed out.
The total Philippine electronics exports grew by 12.9 percent in 2021 and reached an all-time high of $45.92 billion. The 2021 export performance was even 6 percent higher than the pre-pandemic exports of $43.3 billion, thereby signaling a resurgence in the industry.
“Our export growth target for 2022 is the same as 10 percent in 2021, but actual in 2021 was 12 percent,” said Lachica.
He said that SEIPI strives to improve the environment for electronics investments in the Philippines during the ongoing pandemic, regulatory roadblocks are encountered, such as the change in VAT rules from the Bureau of Internal Revenue’s (BIR) Revenue Memorandum Circular (RMC) No. 24- 2022, logistics delays caused by the implementation of the Commission on Elections (COMELEC) Gun Ban, and the Bureau of Customs’ (BOC) Electronic Tracking of Containerized Cargo (ETRACC) implementation, overtime charges, and X-Ray Selectivity System.
Despite these challenges, he said, the organization continues to be “the voice of the industry and to work with government partners” as he cited the Department of Trade and Industry (DTI), Anti-Red Tape Authority, Philippine Economic Zone Authority (PEZA) and the Export Development Council (EDC) to enhance the investment environment by promoting the Ease of Doing Business to enhance the country’s competitiveness.
SEIPI’s electronics industry roadmap called the Product and Technology Holistic Strategy (PATHS) includes a plan to set up an IC Design Laboratory (ICDL) at the Department of Science and Technology (DOST) facility.
The ICDL project proposal has been posted in the DOST Project Management Information System (PMIS) last April 17, 2022. The ICDL will leverage on the mature and broad experience of SEIPI to attract investments and expansions to the Philippine IC design sector. The ICDL will complement DOST’s Center for Integrated Circuits and Devices Research (CIDR) ecosystem.
DOST’s Advanced Science and Technology Institute (ASTI) will provide broadband connectivity, high power computing, and server capacity to link ICDL to CIDR’s mirror laboratories. It will leverage the experience of a service provider in training SEIPI’s well-defined clientele among its industry partners and affiliates. SEIPI, together with the IC Design Technical Working Group (TWG), will choose the appropriate Electronic Design Automation (EDA) tool for the ICDL taking into consideration the specific IC applications indicated by collaborating SEIPI member-companies and universities in their Letters of Intent (LOI).
The IC Design TWG is composed of S&E (semiconductor and electronics) companies and universities working together to address the IC design industry issues, including the development of the country’s talent pool and access to IC design tools.
On parts localization, the TWG continues SEIPI’s initiatives to lessen reliance on imported materials to limit dollar leakage and help the local economy grow more.
SEIPI member-companies were surveyed for their high-value parts requirements that could be localized. The consolidated data were categorized into three categories: Consumables and Packing Materials, Top Imported Materials consisting of indirect materials, and Constructive Exports of ICs and passive components.
The Wire Harness TWG will tap into SEIPI’s Parts Localization and launch projects to help achieve a sustainable supply of wire harness products from the local manufacturers. Power cords and magnetic wires were recently added to the scope of the Wire Harness TWG to accommodate more local manufacturers of copper-based products.
The Industry 4.0 TWG conducted a baseline survey consisting of questions in three manufacturing dimensions namely, Shopfloor Automation, Shopfloor Connectivity, and Shopfloor Intelligence. This survey intends to assess the IR 4.0 readiness of the manufacturing members of SEIPI.
The anonymized data will be used by the TWG to develop a roadmap to guide the members on Industry 4.0 implementation to be executed in partnership with the Department of Trade and Industry (DTI).
Another SEIPI PATHS initiative is the Sector Skills Council (SSC), which aims to specify the skills that our industry needs, develop, and implement a roadmap. The SSC was formed in partnership with the Philippine Business for Education (PBEd) under the A Future that Works (AFW) program funded by the Australia’s Department of Foreign Affairs and Trade (DFAT).
The first two initiatives identified by the SSC will support the ICDL. The ICDL will deliver IC Layout and Verification Specialists training for technician re-skilling, and a Certification in IC Design course for engineer upskilling. The first SSC initiative is being done in collaboration with TESDA, wherein a Skills Mapping Survey is being refined to develop TESDA’s Training Requirements (TRs) to include IC layout and verification.
The second SSC initiative involves the review of CHED’s PSGs (Policies, Standards, and Guidelines) in IT and related engineering degree programs. SEIPI is working with its IT and Engineering Networking Committees (NWCs) as well as IC Design and IR 4.0 TWGs to align the PSGs with global S&E technological advancements that are relevant to the talent requirements of the local industry.