The Philippines as a semiconductor investment destination

LATE last month, US Under Secretary for Growth, Energy and the Environment, Jose Fernandez said that the Philippines is one of the seven countries chosen as a partner for the “CHIPS and Science Act”. Other partner countries include Mexico, Panama, Vietnam and Puerto Rico.

The act is basically outsourcing policy for American semiconductor tech. According to Fernandez the partner countries will serve t o “support semiconductors supply chains back home.” The US created the CHIPS and Science Act to avoid dependency on Chinese semiconductor manufacturing and to re-shore critical semiconductor manufacturing, while friend-shoring some of the less than critical ones.

It’s worth mentioning that the Philippines already has its own semiconductor industry, but from what I’ve read, we are low on the lower part of the totem pole. If this partnership pushes through, we have the opportunity to move up the supply chain.

I support t he Philippines’ participation in this deal, and the resulting investment it will generate. Even if we remain at the bottom of the supply chain, the jobs and tech we will receive will be worth it. However, everybody needs to know the challenges we will face.

Semiconductor manufacturing requires good infrastructure, good talent and good security. This means good roads and ports, good power generation, a large population of engineers or engineering-adjacent personnel. It will also require changes to our legislation, specifically to cater to the needs of new semiconductor investment.

And of course, there’s the political side of things. Semiconductors equals A.I. and A.I. is considered a critical asset at this point in time. If we are going to be part of the US’ semiconductor supply chain, we need to be prepared for issues like industrial espionage, intellectual property crimes and the geo-politics of tech and innovation. There is a reason why the US does not want China (and Russia) to have access to its tech after all.

In any case, this is all at the planning stage at the moment but if what Fernandez said is true our leaders should be prepared for techrelated investment, along with all its benefits and challenges./