Electronics, semicon sector eye recovery in second half

THE semiconductor and electronics industry aims to recover in the second half of the year.

But the strict lockdowns and border controls are posing a big challenge for the industry’s recovery.

“Year-to-date, the industry has contracted by 14 percent,” said Dan Lachica, president of the Semiconductor and Electronics Industries in the Philippines, referring to the impact of the Covid-19 pandemic on the industry.

Lachica said Cebu, which is now on its third enhanced community quarantine (ECQ), remains in a “difficult challenge” situation.

Cebu’s ECQ status was futher extended until July 15.

“While most of our electronics factories are in Mactan, a number of workers come from Cebu and were not allowed to pass through the checkpoints despite the fact that the export industry has been allowed to operate up to 100 percent of capacity,” he said.

Without the workers, electronics companies cannot operate.

But amid the situation, Lachica said there are no layoffs or cancelled contracts yet.

“However, unless workers are not allowed to pass through, layoffs and cancelled contracts may not be far behind,” he warned.

According to Seipi, there are 14 semiconductor and electronics locators in Central Visayas accredited by the Philippine Economic Zone Authority.

These companies manufacture chargers, optical disc drives, electronic connectors, aluminum bonding wires, electrical switches and others.

The semiconductors and electronics industry employs about 3.2 million direct and indirect workers in the Philippines.

In Central Visayas, the industry employs about 50,000 direct workers.

When China, one of the industry’s biggest suppliers of raw materials, closed its borders due to Covid-19 pandemic, it affected the industry’s operations.

Now that it is back on its feet, the industry is faced with challenges in terms of manpower availability as community quarantines are imposed in the different parts of the Philippines.

Cebu is one of four key areas where most of the electronics businesses in the country operate. The industry remains a significant driver of the economy and the largest contributor to the country’s manufacturing sector.

Export, import

Electronic products continued to be the country’s top export with total earnings of US$1.60 billion.

This amount, which accounted for 57.3 percent of the total exports in April 2020, decreased annually by 48.6 percent, from $3.11 billion in April 2019.

Imports of electronic products, on the other hand, were valued at $1.30 billion. It accounted for the highest share of 39.6 percent to total imports in April 2020. Import value for this commodity group, however, declined by 46 percent in April 2020, from $2.40 billion in April 2019.