Semiconductor industry hoping EU pursues its own CHIPS Act

THE Semiconductor and Electronics Industries in the Philippines Foundation, Inc. (SEIPI) said it is hoping the European Union (EU) legislates its own version of the US CHIPS and Science Act. 

At a panel discussion at the EU-Philippines Business Conference on Wednesday, SEIPI President Danilo C. Lachica said he hopes the EU makes similar moves to further diversify its semiconductor supply chain.

“The US CHIPS Act carves out about $52.9 billion to onshore semiconductor wafer fab manufacturing back to the US,” Mr. Lachica said.

“The EU (may) want to bring in the capacity… so it will be less dependent on Taiwan and China for semiconductors,” he added.

In connection with such a shift, he said: “I’m hoping to see more investment poured into the Philippines for semiconductors and electronics,” he said.

“We have a growing integrated circuit (IC) design industry. We have about six companies. Unfortunately, none of them are from the EU, and I hope to see investment from there,” he added.

He said the biggest EU semiconductor company operating in the Philippines is STMicroelectronics, adding that he hopes the EU will consider IC design, wafer fab, and assembly, test, and packaging operations in the Philippines.

In 2023, the semiconductor industry exported $45.6 billion, or 62% of all Philippine commodity exports, according to Mr. Lachica.

“Of the top five export destinations of the Philippines, four are in Asia, and one in the US. Hong Kong is the top export destination, close to 30%. The US is number two, and there’s been a turnaround, with China now number three,” he said.

“But for the EU, the top two destinations are essentially Germany at about 4.9%, and the Netherlands at about 2.5%. So, between the two of them, close to about $4 billion, which is, like I said, we’d like to see grow,” he added.

He said that the Philippine semiconductor and electronics industry lost ground during the previous administrations as capital fled in response to incentive rationalization.

“But the good news is that our new administration is fixing those with the Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy (CREATE MORE) Act and other incentives,” he said.

“So, we are very optimistic about announcing that the Philippines is back. It’s a strong, open industry, both for investors as well as exporting to the EU,” he added. — Justine Irish D. Tabile