US calls on region to up chip output
MANILA: The US wants to help the Philippines double its semiconductor facilities, to lessen the geographic concentration of the global chip supply chain, Commerce Secretary Gina Raimondo said in a business forum in Manila yesterday.
The comments came in the wake of announcing over $1 billion in investments from US companies in the Philippines as part of a trade mission organised by President Joe Biden and led by Raimondo.
The commerce chief, much like US Secretary of State Antony Blinken, has sought to encourage nations in Southeast Asia to deepen their investment in chipmaking and related industries, at a time when much of that business still happens in Taiwan and South Korea.
“US companies have realised that our chip supply chain is way too concentrated in just a few countries in the world,” Raimondo said.
“Forget about geopolitics, just at that level of concentration, you know the old adage don’t put all your eggs in one basket. Why do we allow ourselves to be buying so many of our chips from one or two countries? That’s why we need to diversify.”
The Philippines has 13 semiconductor assembly, testing and packaging facilities and Raimondo said “let’s double it.”
She did not offer any specifics on how the US may assist in that, other than to say it would be an attractive destination for US corporate customers. The Asean member is rich in critical minerals, she added, and businesses are looking internationally to make their supply chain more resilient.
“I believe you are on top of the list,” Raimondo told Philippine executives.
American companies are set to announce investments amounting to more than $1 billion in the Philippines, Raimondo said during the visit on Monday.
Raimondo is heading a two-day trade and investment mission, the first of its kind for the Philippines. The delegation includes executives from 22 companies including United Airlines, Alphabet’s Google, Visa, KKR Asia Pacific and Microsoft.
The investments will span areas like solar energy, electric vehicles and digitisation, she said.
United said last week it would launch new flights from Tokyo-Narita to Cebu, Philippines starting July 31.
NO PLANS TO ‘DECOUPLE’
US efforts to deepen economic ties with the Philippines come in tandem with increased cooperation in defence. Both Biden and Philippine President Ferdinand Marcos Jr are keen to counter what they see as aggressive actions by China in the South China Sea and near Taiwan.
Speaking at a joint briefing with Philippine officials after meeting with Marcos at the presidential palace, Raimondo said Washington’s commitment to expanding trade and investment in the Philippines extends to the larger Indo-Pacific region through the Indo-Pacific Economic Framework — a 14-nation US-led group.
Raimondo reaffirmed that the United States has no intention of “decoupling” from China but it would not be allowed access to Washington’s advanced technology.
“My job is to protect the American people and to make sure that our most sophisticated technology, including semiconductor technology, artificial intelligence technology that we have and China doesn’t have, that they can’t access it and use it to enable the Chinese military,” Raimondo said.
She also reaffirmed the United States’ alliance with the Philippines, calling it “ironclad”.
The Philippines has a 73-year-old mutual defence treaty with the US, making it Washington’s oldest treaty ally in the Asia-Pacific region.
After her Manila visit, Raimondo will travel to Thailand for two days of meetings. She will lead members of the US President’s Export Council to identify opportunities for the two countries to strengthen cooperation in areas such as manufacturing and supply chain resiliency.