US to fund semiconductor investments in Phl–envoy

HE United States has named the Philippines as one of the seven countries which will get funding from its program to strengthen and diversify its semiconductor supply chain, a visiting senior diplomat said.

“We picked only seven countries to work with, and we picked those countries on the basis of their potential to support semiconductors supply chains back home. e Philippines is one of them,” US State Undersecretary for Economic Growth, Energy and the Environment Jose Fernandez said.

Some of the other countries eyed are Vietnam, Panama, Costa Rica, Puerto Rico and Mexico.

e pandemic and trade war between China and the US have disrupted the global supply chain of semiconductors. e supply shortages have led to bottlenecks in the production of smartphones, computers, cars, medical devices, educational aid and other technologies that rely on chips.

Analysts estimate that the global semiconductor demand is expected to grow from roughly US$600 billion to US$1 trillion in six years, with the exponential growth of AI, surge in demand for electric vehicles and continuing trend of remote work setup.

In 2022, the US Congress passed the CHIPS and Science Act that allocates US$280 billion to boost domestic research and manufacturing of semiconductors in the

US. e 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.

Fernandez said the Philippine semiconductor industry is “thriving,” the largest export-revenue generating sector in the Philippine economy.

Around 60 percent of semiconductor investments in the Philippines come from the US like Texas Instruments, Onsemi, Analog Devices, Amkor and Teradyne. eir assembly and test operations directly support the US automotive industrial and consumer electronics manufacturing sectors.

e semiconductor industry employs 2.5 million Filipinos directly and indirectly.

“[For] US companies that want to invest in semiconductors, the one common complaint is that they can’t find enough qualified workers. Well, many of them are here,” the US State official said.

“And so there’s great interest on the part of companies around the world, including US companies, to invest in the assembly, testing and packaging here,” he added.

e Biden administration has allocated US$500 million under the International Technology, Security and Innovation (ITSI) Fund to implement the CHIPS Act in the Philippines and six other partner countries. e five-year program aims to promote the expansion of international assembly, testing and packaging capacity in those areas.

e Organization for Economic Cooperation and Development (OECD) will soon release its recommendation on how the US can help the Philippines improve its semiconductor industry.

During his Manila trip, he met with semiconductor companies, mining companies, the US Chamber of Commerce, officials from the Departments of Trade and Industry, Foreign Affairs, and Finance.

Aside from semiconductors, American companies are also keen to invest in critical mineral and renewal energy priority infrastructure projects in the Philippines.