By Andrea E. San Juan @andreasanjuan
The Philippines is seeking technical partners from Europe and the United States as Manila is planning to establish a lab-scale wafer fabrication plant in the country, according to Trade Secretary Alfredo E. Pascual.
Pascual told reporters last week that he looked at the laboratory for wafer fabrication as a side activity in Leuven, Belgium. This, he said, was undertaken after the announcement of the resumption of negotiations for a free trade agreement (FTA) between the Philippines and the European Union (EU) in Brussels.
“It was more educational to understand how this works. Kasi ang dalas ko sabihin pero hindi ko pa nakikita,” he told reporters on the sidelines of the induction ceremony of the Council of Engineering Consultants of the Philippines Board of Directors held recently in Ortigas City.
He said visits like this will help the government carry out plans to develop a lab-scale wafer lab in the Philippines.
“We need a technical partner, an international partner,” Pascual said, adding that the government is already in talks with potential partners from Europe and the US.
Pascual said a laboratory for wafer fabrication is a “critical element” in the value chain of semiconductor, adding that the Philippine semiconductor supply chain consists of only the integrated circuit (IC) design as well as assembly, testing, and packaging.
Danilo C. Lachica, president of the Semiconductor and Electronics Industries in the Philippines Foundation, Inc. (Seipi) said the wafer fab is essential for the chip industry.
Currently, Lachica said manufacturers send the taps or Gerber files to a wafer fab to Taiwan Semiconductor Manufacturing Company (TSMC).
Wafer fab is a semiconductor processing facility which turns wafers into integrated circuits.
Last February, the Board of Investments (BOI), an investment promotion agency attached to the Department of Trade and Industry (DTI) which Pascual co-chairs, said it is “looking into the establishment of a lab-scale wafer fabrication plant.”
“Utilizing a more generic technology for commercial and educational purposes, the wafer fab lab aims to train and upskill the workforce, while enabling the local industry to do prototyping and some tape outs of semiconductor chip designs in the country instead of bringing them all the way to Taiwan,” the BOI said in a statement.
The US recently named the Philippines as one of the seven countries which will get funding from its program to strengthen and diversify its semiconductor supply chain. (Full story here: https://businessmirror.com.ph/2024/02/01/us-to-fund-semiconductor-investments-in-phl-envoy/)
In 2022, US Congress passed the CHIPS and Science Act that allocates $280 billion for boosting domestic research and manufacturing of semiconductors in the US. The Biden administration is looking at engaging with allies and partners to support the US in expanding its global semiconductor ecosystem that is resilient from disruptions such as pandemics, cybersecurity threats and natural disasters.
Meanwhile, in a televised interview last Friday, Lachica said the Philippine electronics and semiconductor industry is keen on increasing its presence in Europe following the recent announcement made by the European Commission that the 27-member bloc European Union is relaunching negotiations for an FTA with the Philippines.
“The intent really is to promote trade as you know the electronics industry is the biggest commodity exporter,” he said.
“We accounted for about 62 percent of our exports and the thing about it is that you know, Asia and US are our main export destinations, main trade partners, but we don’t have much in Europe.”
The Seipi chief noted that Netherlands and Germany are the top buyers of Philippine-made electronics in Europe.
Lachica also said he had the opportunity to join President Ferdinand R. Marcos Jr. in signing a memorandum of understanding (MOU) with the Czech Republic.
“In fact, after we signed the MOU, that was last Friday, we’ve already had inquiries from Czech companies looking for potential partners in the Philippines. So it bodes well for our industry.”
Philippine electronic exports contracted by 9.2 percent to $41.9 billion in 2023 from the $46.15 billion in 2022, data from the Philippine Statistics Authority (PSA) showed.
However, the January 2024 from the PSA indicated that earnings from outbound shipments of Philippine semiconductor and electronics grew by 16.3 percent to $3.45 billion from the $2.97 billion posted in January 2022.
Latest export data showed that electronics still occupies the largest chunk in the country’s merchandise exports pie, with a 58.2-percent share.