The Semiconductor Industry Association (SIA), which is composed of the world’s electronics giants, has remained confident that the Philippines will remain a critical player in the global semiconductor industry and a major hub for semiconductor assembly and test manufacturing.

SIA members visited the Philippines to share investment prospects and business opportunities for the Philippines with the passage of the CHIPS Act of the United States.

SIA President and Chief Executive Officer John Neuffer and Vice President for Global Policy, Jimmy Goodrich, paid a courtesy call on Trade Undersecretary and Board of Investments (BOI) Managing Head Ceferino Rodolfo on Monday, Jan. 16.

SIA and the government agencies exchanged views on the impacts of recent US export controls, semiconductor supply chain security and resilience initiatives, as well as potential opportunities for US-Philippines semiconductor cooperation, especially in R&D and workforce development, with the allotted $500 million funding under the CHIPS Act.

SIA represents 99% of the United States (US) semiconductor industry by revenue and two-thirds of non-US chip firms. Many of SIA's member companies have significant investments in the Philippines including Analog Devices, Onsemi, and Texas Instruments, among others.

While the CHIPS Act incentivizes the manufacturing of microchips domestically in the US, there remain several segments in the semiconductor supply chain such as assembly, testing, and packaging, which are more cost-effectively conducted outside of the US.

According to SIA President John Neuffer, “while the CHIPS Act aims to increase the capacity of the US semiconductor industry, we recognize that we cannot do it all in the US. And that’s where countries like the Philippines have an opportunity. The CHIPS Act encourages manufacturing in the US, but rather than reshoring all manufacturing activities, it is more of rebalancing the supply chain.” The pandemic has forced global businesses to rethink their supply chain strategies and consider diversification of suppliers to mitigate disruptions in their business operations.

Rodolfo expressed appreciation for SIA’s confidence in the country’s investment prospects. “We thank our US partners for the opportunities that you have presented, and for recognizing the Philippines as one of your key partners. We, in the Philippine government, stand with the local semiconductor industry in promoting partnerships and enhancing local capacities and competencies in semiconductor manufacturing to deepen the country’s role in the global semiconductor supply chain and be able to further support US companies in its endeavors under the CHIPS Act,” said Undersecretary Rodolfo. “We look forward to working more closely with SIA and the US government to see more collaborations in R&D and manufacturing semiconductors,” he said.

The majority of the industrial parts and components are still sourced from ASEAN and East Asian countries and the Philippines is expected to play a bigger role with its growing capabilities in advanced technology programs (ATP), research and development (R&D), integrated circuit (IC) design, and software development.