Electronics Industry

 

According to the Semiconductor & Electronics Industries in the Philippines, Foundation Inc. (SEIPI), “the Philippine Electronics Industry is classified into 73% Semiconductor Manufacturing Services (SMS) and 27% Electronics Manufacturing Services (EMS). Most of the electronics businesses in the country operate in four key areas: Metro Manila, CALABARZON, Northern/Central Luzon, and Cebu. Electronic companies in the country practice the best-known methods in manufacturing with capabilities ranging from integrated circuit packaging, printed circuit board assembly, and full product assembly.”

According to the organization, year-to-date (January – August) data for 2021 shows that PH Electronics Exports has a total value of US$ 29.99 billion. Moreover, 21.50% of the country’s electronics exports went to Hong Kong, followed by USA (12.64%), China (12.60%), Singapore (9.15%), and Japan (6.55%), which complete the top five exports destinations of the electronics sector.

The Philippines is host to seven of the world’s top 20 chipmakers, which comprise 10% of the global semiconductor manufacturing and supply. In addition, the country supplies 50% of the world demand for 2.5” hard disk drive (HDD) and 10% of the world demand for 3.5” HDD. Three of the largest HDD producers are in the Philippines: Hitachi Ltd. (produces 500,000 HDDs a year); Fujitsu Computer (manufacturers HDDs for desktops, servers and file storage, magneto-resistive heads, and media disk); and Toshiba Philippines (manufactures HDDs, laptops).

The Philippine semiconductors and electronics industry specializes in manufacturing assembly, testing, packaging, and distribution. Among the firms investing in the country include Texas Instruments, Toshiba Information Equipment, Inc., Amkor, HGST (A Western Digital Company), and Fairchild Semiconductor (Phil.), Inc., Analog Devices, ONSemiconductor, Cypress, Maxim, NXP, STMicroelectronics, and IMI Electronics.

As of the first quarter of 2013, there are over 424 electronics firms in the Philippines. Majority of electronic firms in major hubs such as those in Baguio, Calabarzon, Cebu, Clark, and Metro Manila are declared as special economic zones. About 73% of the total number of Philippine electronics companies provide SMS services and 27% provide EMS capabilities.

Philippine electronics manufacturers have varied capabilities that include IC packaging, PCB assembly, full product assembly, and R&D. Employed manufacturing methods include Just-in-Time (JIT), Total Quality Management (TQM), lean manufacturing (Six Sigma), GJ, BSC, and OPIC. PCB assembly is an EMS. It deals with the main PCB types of single-sided boards (circuits on one side only), double-sided boards (circuits on both sides), and multi-layer boards (three or more circuit layers).

The assembly and testing operations in the Philippines involve processes such as materials development, packaging modeling and simulation, process development, semiconductor packaging, test development, and test engineering. Some firms have other capabilities that increase the value-added of these backhand operations (i.e., wafer bumping operations).

Advantages and Capabilities

• Critical Mass of Global Players
  • Majority of the electronics companies are located in Metro Manila, CALABARZON, Northern/Central Luzon, and Cebu.

• Filipino Workers
  • Highly competitive, English-proficient, and skilled workers
  • Trainable (8 weeks/2 months), adept at technology, and short learning curves
  • Wide talent pool as there are about 500,000 who graduate yearly

• Strategic Location
  • Located within a 4-hour flying time from major capitals within the region
  • A critical entry point to over 500 million people in the ASEAN market
  • A gateway of international shipping and air lanes suited for European and American businesses

The electronics industry roadmap includes five major strategies with specific activities that aim to contribute to the advancement of the industry, as follows:

• Drive Up Our Semiconductors and Electronics Manufacturing (DoSEMI)
• Foster Academic Linkage
• Develop Research and Development Capabilities
• Create Conducive Business Environment
• Reduce Costs of Operation

The industry blueprint Product and Technology Holistic Strategy (PATHS) was developed by the electronics and semiconductor industry to increase the amount of investments and export revenues of the country. Under PATHS, the sector expects annual investments to reach US$1.5 billion by 2020, US$3 billion by 2025, and US$5 billion by 2030.

Export revenues are also expected to rise to US$40 billion in 2025 and US$50 billion in 2030.

The Department of Science and Technology Philippine Council for Industry, Energy, and Emerging Technology Research and Development (DOST - PCIEERD) introduced several programs that are relevant to the electronics industry: the Advanced Device and Materials Testing Laboratory (ADMATEL), the Electronics and Product Development Center (EPDC), and the Philippine Institute for Integrated Circuit (PIIC).

BOI, SEIPI, and the Department of Trade and Industry have identified market opportunities or potential players for the advancement of the electronics industry.

Industry-Government Strategy for Market Growth

• Supply Chain Development
  • Opportunities in the Solar Industry
  • Aggressive Investment Promotion
  • Build stronger linkages with the academe