Integrated Circuits Design Industry
Integrated circuits (ICs) are small wafers that can accommodate hundreds to millions of transistors, resistors, and capacitors. ICs enable the storage and/or processing of information in electronics, making them the most important electronic component. Some of the various types of ICs are memory, logic, microprocessors, and microcontrollers.
The IC market consists of sales of ICs and related services that are used in various applications such as automobiles, telecommunication, aerospace and defense, and consumer electronics. An IC is a small chip that acts as an amplifier, an oscillator, a timer, and a memory computer.
According to The Business Research Company, the global IC market size is expected to grow from $330.32 billion in 2021 to $349.76 billion in 2022 at a compound annual growth rate (CAGR) of 5.9%. The growth in the market is mainly due to the companies rearranging their operations and recovering from the COVID-19 impact, which had earlier led to restrictive containment measures involving social distancing, remote working, and the closure of commercial activities that resulted in operational challenges. The IC market is expected to reach $417.27 billion in 2026 at a CAGR of 4.5%.
IoT is expected to boost the growth of the IC market due to the various benefits of using analog ICs across a wide range of real-time connected devices and applications. Analog ICs have efficient power consumption features and the signal processing capabilities that are needed to configure an automated devices ecosystem.
The global IC market is segmented into the following:
- By Product Type: Digital IC, Analog IC, Mixed-Signal IC
- By Application: Automotive, Industrial, Consumer Electronics, IT & Telecommunication, Health Care, Aerospace & Defense, Others
- By Type: General-purpose IC, Application-specific IC
The IC value chain has the following main subdivisions: the upstream chip design industry (technology-intensive attributes); the midstream chip manufacturing industry (capital and technology intensive); and the downstream chip packaging and testing industry (labor and capital intensive), which together constitute the core of the value chain.
The Philippines aims to position itself as a key player in the global IC design industry ecosystem by becoming a home base of competitive IC design companies that would provide services to the worldwide IC ecosystem, and by being an attractive destination for foreign IC design-related companies so they would invest in the country.
As of the second quarter of 2021, semiconductors accounted for approximately 43.1% of the total goods exported from the Philippines, equivalent to over Php 314 billion. Semiconductors account for the highest share of electronic product exports from the country.
The Philippines accounts for 2.8% of world IC exports and has been among the top 10 exporters for at least the last decade.
The semiconductor and electronics manufacturing industry is one of the biggest economic growth drivers in the Philippines. Mainly composed of SMS (73%) and EMS (27%) firms, the industry employs around 3.2 million direct and indirect workers.
Among the advantages and capabilities of the industry include:
- the labor force; and
- critical mass of global players
- strategic location;
- business environment; and
- competence of the Philippine Export Zone Authority (PEZA)
The majority of the electronics companies are concentrated in Metro Manila (52.11%), CALABARZON (39.85%), Northern/ Central Luzon (4.98%), and Cebu (2.68%).
The opportunities for scalability for the country can be considered for two areas: the Mobile Convergence Segments and the Industrial Segment.
