Semicon parts delivery takes 1.5 years — SEIPI

The Ukraine war continues to disrupt the semiconductor supply chain

From two years, the delivery time for semiconductor manufacturing equipment and raw materials from Europe has been shortened to one and a half years, according to the Semiconductor and Electronics Industries in the Philippines Foundation Inc. SEIPI president Dr. Danilo Lachica said such delivery time still entails a staggering wait time.

“The normal lead time is from 6 to 9 months in 2019, now it takes 1 and a half years,” Lachica said in an interview.

Expediting the delivery of the raw materials from the traditional vessel to air freight costs 10 times more, he added.

Lachica blamed the shipment lag to the ongoing war in Ukraine. Russia supplies about 70 percent of palladium used to power semiconductor devices, while Ukraine delivers 40 to 50 percent of neon which is used for lasers and Andon lights worldwide.

“Aside from these, the Ukraine-Russia war made fuel prices soar, disrupting all supply chains. But the good thing is, still there is the demand for electronics. So, I guess the industry is starting to improve, but it’s not quite there yet,” he said.

As of September 2022, the cumulative electronics exports reached $35.34 billion, a 4.71 percent increase from last year’s figures.

The amount is 60.60 percent of the $58.31 billion total Philippine commodity exports, thus retaining the industry’s position as the country’s top export.

Last year, Philippine electronics exports grew 12.9 percent, reached an all-time high value of $45.92 billion. That export performance was 6 percent higher than the pre-pandemic exports of $43.3 billion, signaling a resurgence in the industry.

Lachica said he is hoping the environment would have already changed.

“But this depends on how well the Ukraine-Russia conflict would turn out. Anyway, the electronics industry is very resilient. Even if prices are up, production will still be there.

The demand for medical electronics, telephones, as well as storage devices due to hyperscalers and automotive electronics, is now peaking up,” he said.

The normal lead time is from 6 to 9 months in 2019, now it takes 1 and a half years.

PHOTOGRAPH COURTESY OF THERMA MARINE (FROM left) AAQMS DENR PENR Officer Achilles Anthony C. Ebron, Regional Director EMB III OIC Albert G. Arcamo, Agata Mining Ventures Inc. MEPEO Head Len Marc Tagud, Cabadbaran City Mayor Judy C. Amante, and AboitizPower FVP-Oil BU Cirilo A. Nanual Jr. at the turnover ceremony and inspection of the CAAQMS.