1 week Ago By Den Somera
In his talk at The Monday Circle forum , industry consultant Cesar Tolentino described the current developments in the semiconductor industry as “very exciting.” This is the second time I’ve heard of these words in the last two months to describe the investment prospects of the country, amid the political fussing in our backyard and confused reactions from the “stunning reciprocal tariffs” recently unveiled by US President Donald Trump to countries believed to have unfair trade practices against the United States. Must Read [Vantage Point] Understanding Trump’s reciprocal tariff on the Philippines The first was from Paulo Campos III, the founding managing general partner of Kaya Founders, one of the leading early-stage venture capital firms in the country that has a successful investment record in the next generation of high-impact enterprises — attracting investment interests even from countries like Singapore, Indonesia, and Vietnam.
Tolentino is in the process of completing his study for the formulation of a strategy for the Philippine semiconductor and electronics industry, that he hopes will give the country an edge over early favorite investment destinations like Malaysia, Vietnam, Thailand and Singapore. Must Read [In This Economy] Trump imposes a 17% tariff on the Philippines: What can we do? Industry status Semiconductor and electronics products are the country’s biggest exports, making the Philippines the ninth-largest chip exporter globally. As an industry, it accounted for 59.
28% of total Philippine exports as of April 2023, with export receipts reaching $12.9 billion during that period. In 2024, the semiconductor sector alone contributed nearly 40% of the country’s total exports, valued at $29.
16 billion. In this sector, the Philippines is a key player in assembly, testing, and packaging (ATP) services within the global semiconductor supply chain, and estimated to grow at the rate of about 11.91% annually from 2024 to 2027, valued at $9.
53 billion. At the moment, the country is the host to several prominent semiconductor and electronics companies, including Amkor Technology, Panasonic, Murata, Sumitomo Electric, Samsung, Brother, Canon, Toshiba, Epson, Texas Instruments and Analog Devices, which are engaged in one or two, or more of the following business processes: 1) integrated device manufacture (IDM); 2) outsourced semiconductor assembly and test (OSAT); 3) electronics manufacturing services (EMS); 4) contract electronics manufacture (EM); and 5) original equipment manufacturing (OEM). IDM companies design and manufacture their own semiconductor chips, controlling the entire process from research and development to fabrication, unlike fabless companies that only design and outsource manufacturing while OSATs are companies that provide third-party services for the packaging (assembly) and testing of semiconductor devices commonly called integrated circuits or chips after they’ve been fabricated, allowing chip designers to focus on design rather than manufacturing.
EMS companies provide outsourced manufacturing, assembly, and testing of electronic products, including semiconductors and related components, allowing original equipment manufacturers (OEMs) to focus on design and core competencies. EM Microelectronic is a semiconductor manufacturer specialized in the design and production of ultra-low power, low-voltage integrated circuits (IC). Also operating in the country with strong presence in assembly, testing, and packaging, and integrated circuit design are the following companies, several of which are 100% Filipino-owned: ATEC Semiconductor, Amkor Technology Philippines Inc.
, Cirtek Holdings Philippines Corporation, Fastech Synergy Philippines Inc., Integrated Micro-Electronics Inc. (IMI), listed company Ionics Inc.
, Megachip Semicon Electronics Corp., Nexperia Philippines Inc., ON Semiconductor Philippines, ROHM Semiconductor Philippines, SFA Semicon Philippines Corporation, SPI/Semicon, Sanyo Semiconductor Manufacturing Philippines Corporation: Manufactures semiconductor products, Vishay Philippines Incorporated, and Xinyx Semiconductor Design Services Inc.
Must Read Nurturing next generation of semiconductor innovators in PH Opportunities and challenges Tolentino said that his excitement was particularly ignited by the surge of investments in the semiconductor and electronics industry in the last 18 months precipitated by the global clamor of companies for diversification of supply chains and moves to decouple from China. Making such move is Sumitomo Metal Mining (SMM) of Japan. It’s ramping up its nickel business operations in the Philippines.
SMM is already the principal buyer for the nickel production of listed company Nickel Asia Corporation (NKIL). It also holds 75% stake in the Taganito high-pressure acid leaching (HPAL) nickel facility in Surigao del Norte. Nevertheless, SMM consolidated its 84.
375% stake in Coral Bay Nickel Corporation (CBNC) by acquiring the remaining 15.625% interest held by NKIL last January 2025. CBNC has a capacity to produce 24,000 tons per year of nickel and 2,500 tons per year of cobalt, which is a crucial raw material for batteries, particularly lithium-ion batteries, which are essential for powering electric vehicles (EVs).
Also, SMM develops and produces battery materials, such as cathode material for rechargeable batteries, which are expected to see increasing demand due to the electrification of automobiles. As of today, the company’s battery materials have been adopted by Tesla and Toyota Motor Corporation for their in-car batteries. Likewise, while the Philippines is already late in the establishment of a facility to manufacture Silicon wafers which are cheaper and are mainly used at present for manufacturing integrated circuits (ICs) and microchips — which are essential components in various electronic devices, including computers, smartphones, and solar cells — there is a fast-growing need for the use of gallium arsenide wafers (GaAs) due to their technical advantages.
The Philippines is ahead in this area as it has the foundations for the growth and development of this market segment. One such advanced facility has been inaugurated as early as February 3, 2023 in Laguna. The global market for wafers alone were valued at approximately $18.
0 billion in 2023 and estimated to have reached $20.0 billion in 2024 and expected to reach a value of around $34.0 billion by 2033, at a compound annual growth rate (CAGR) of about 6.
3%. Tolentino also said that Samsung Electronics Co. Ltd.
has already relocated its R&D hub in Batangas, while American company General Electric has started to source mainly its semiconductor materials from the Philippines, and that at least five of the top seven semiconductor companies in the likes of NVIDIA, Broadcom, Qualcomm, ASML, and Applied Materials may soon be making a big presence in the Philippines. The Philippines, however, has to successfully resolve several challenges to become a significant player. It has to actively encourage foreign investments and undertake collaborative works to enhance the industry’s capabilities, particularly in developing the country’s supply and value chain in the semiconductor industry.
Being the country with the second lowest tariff in Southeast Asia, the Philippines has the potential to attract investors who might be considering transferring their businesses from other countries in the region. If this is so, it’s time to watch out for some of our listed semiconductor companies in the market. – Rappler.
com (The article has been prepared for general circulation for the reading public and must not be construed as an offer, or solicitation of an offer to buy or sell any securities or financial instruments whether referred to herein or otherwise. Moreover, the public should be aware that the writer or any investing parties mentioned in the column may have a conflict of interest that could affect the objectivity of their reported or mentioned investment activity. You may reach the writer at densomera@yahoo.
com) Must Read Trump tariffs will hurt PH GDP growth by 0.1% in 2 years – NEDA.
