PHL electronics industry welcomes US Chips Act

THE Semiconductor and Electronics Industries in the Philippines Foundation, Inc. (SEIPI) said the US Congress’ recently passed Chips Act will help improve the Philippines’s supply of semiconductor wafers in the long-term.

Nonetheless, SEIPI President Danilo C. Lachica emphasized that the Creating Helpful Incentives to Produce Semiconductors for America Act should be coupled with the completion of the fabrication plants in America in order to see improvement in the supply of Philippines’s semiconductor wafers.

“In the long term (when the fabs are completed in the US), this will help improve the supply of semiconductor wafers for our assembly, test and packing of integrated circuits (chips) in the Philippines,” Lachica told the Businessmirror last Saturday.

“This may work out better for wafer supply,” the SEIPI chief added.

In a televised interview two months ago, Lachica said that the demand has always been there for electronic exports since it plays into the international market. In fact, he said, even amid the pandemic, the demand was always there.

However, Lachica emphasized that it was a matter of being able to come up with the supply especially in the context of shortage of semiconductor wafers.

According to an Associated Press report, “the bill provides more than $52 billion in grants and other incentives for the semiconductor industry as well as a 25 percent tax credit for those companies that invest in chip plants in the US.”

Recently, US House Speaker Nancy Pelosi met with the Taiwan Semiconductor Manufacturing Co. (TSMC).

According to the SEIPI web site, Taiwan places third in the top countries of origin for Philippine Electronics Imports, at 13.58 percent. Specifically, the Philippines imports semiconductor components such as electronic integrated circuits from Taiwan.

According to a Bloomberg report, US Pelosi met with TSMC Chairman Mark Liu “to discuss Congress’s recently passed Chips and Science Act and its $52 billion in subsidies for new chip manufacturing plants on American soil.”

“Taiwan is home to industryleading chip factories as well as an industrial base that supplies key components for electronics, medical equipment and sensitive nuclear power and military use,” read the Bloomberg report.

The report noted that TSMC is Taiwan’s most valuable company and world’s biggest contract chipmaker.

Last month, Lachica underscored that the semiconductor industry in the Philippines has concerns on high operating costs. He stressed that the Philippines is lagging behind Vietnam and other Asean countries.

TheSEIPI chief has also been calling on the government to review the incentives rationalization, which he said is putting the industry at a disadvantage.

In June, Lachica emphasized that there were about $3.2 billion of investments that could have gone to the Philippines but have instead been moved by multinational firms to other countries including Vietnam, Thailand, Malaysia, and China due to issues on the Corporate Recovery and Tax Incentives for Enterprises law, particularly the rationalization of incentives.