The global race to develop semiconductor industries is heating up, with countries like Singapore, Malaysia, Vietnam, and India making significant strides. Now, the Philippines is joining the fray with a new push to expand its presence in the sector.

According to a Bloomberg report, the Philippines is actively reaching out to Taiwanese semiconductor giants such as TSMC and United UMC in an effort to secure equipment and expertise needed to build its own chip fabrication operations.

Dan Lachica, head of the Semiconductor and Electronics Industries in the Philippines Foundation Inc. (SEIPI), explained that they are encouraging companies like TSMC and UMC to send their older, depreciated equipment to the Philippines. In return, Filipino workers would be trained to support these companies’ global operations.

The Philippines, home to more than 100 million people, lags behind its neighbors such as Malaysia and Singapore in the complex chip manufacturing industry, which requires billions of dollars in initial investment. Taiwan, led by TSMC, dominates the global semiconductor market, and its companies are expanding overseas to mitigate risks posed by tensions with China.

Neither TSMC nor UMC provided detailed responses to Bloomberg’s inquiries. TSMC declined to comment, while UMC reiterated its policy of not addressing market speculation.

The Philippines’ strategy is part of a broader effort to move beyond low-margin chip testing and packaging into more advanced areas such as IC design and semiconductor wafer fabrication.

Elsewhere in Southeast Asia, Vietnam has been increasing its focus on semiconductor development. Prime Minister Pham Minh signed Decision No. 1018/QD-TTg on September 21, as reported by the Vietnam Government News website. The decision outlines the country’s vision for semiconductor growth, with short-term goals set for 2030 and long-term projections extending to 2050.

India is also making strides in this field. During Prime Minister Narendra Modi’s visit to the U.S. in September, the two countries agreed to build a semiconductor plant focusing on infrared, gallium nitride, and silicon carbide chips, backed by India’s Semiconductor Mission and a strategic partnership with the U.S. Space Force.

(Photo credit: SEIPI)

In recent years, influenced by complex international dynamics and the need to safeguard supply chain security, Southeast Asian countries such as Singapore, Malaysia, and Vietnam have become prime locations for numerous semiconductor giants to establish overseas operations. Now, the Philippines may join the ranks of these nations.

Recently, U.S. Secretary of Commerce Gina Raimondo addressed her desire to assist the Philippines in doubling its semiconductor facilities to lessen the geographic concentration of the global chip supply chain.

Previously, according to the press release of the U.S. Department of Commerce, Raimondo has announced the plan to invest USD 1 Billion in Philippines.

“The Indo-Pacific includes some of the most dynamic economies in the world. It was an honor to lead the first-ever trade mission of this nature to the Philippines and to underscore the immense potential, which is evident in the more than $1 billion of investments from this mission alone,” said Raimondo.

According to Taiwantrade’s Data, it has indicated that the semiconductor and electronics industry is the top-performing sector among the Philippines’ export commodities, accounting for approximately 60% of total commodity exports.

The semiconductor industry in the Philippines primarily focuses on the assembly and testing sector. With a high literacy rate and a young workforce proficient in English, the Philippines has become a significant assembly and testing hub for global semiconductor giants such as Amkor, Intel, ADI, and TI (Texas Instruments).

Geographically, the semiconductor industry in the Philippines is concentrated in four main regions: Manila, Calabarzon, Northern/Central Luzon, and Cebu. Among these regions, Manila stands out as the primary hub, hosting assembly and testing facilities for globally renowned companies like Amkor, Onsemi, as well as Toshiba’s hard drive assembly plant.

Currently, the Philippines has 13 semiconductor assembly, testing, and packaging facilities. Most of the products produced are exported to other regions for assembly or application. The integrated circuits (ICs) used in these facilities mainly come from Taiwan, the United States, and Japan, with finished products primarily exported to Singapore, China, and Japan.

However, the Philippines is not content with just the assembly and testing sector. In February of this year, it was previously reported by Philippine Board of Investments (BOI) in its press release, stating that the BOI would collaborate with the United States to expand its semiconductor capabilities, including the construction of its first fab.

The BOI aims to build a laboratory-scale fab. This facility will provide general manufacturing process technology to encourage local semiconductor startups and train semiconductor engineers.

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(Photo credit: Intel)