Tereso O. Panga, director general of the Philippine Economic Zone Authority (PEZA), said the country’s semiconductor and electronics industry faces numerous challenges. However, he emphasized that the most pressing gaps to address are the talent shortage and the weak local supply chain. Strengthening these areas would allow the industry to move up the value chain instead of relying heavily on imported materials.
Regarding the talent shortage, Panga told Logisticsnews.PH that there is an urgent need to reskill and upskill workers to prepare them for advanced manufacturing. He highlighted a mismatch between the skills available in the local talent pool and the demands of the industry.
Beyond vocational and technical micro-credential training courses designed to enhance workers’ skills, Panga urged the academe to offer specialized degree programs in fields such as microelectronics, computer science, and data science. He also called for increased focus on STEM education to produce high-quality graduates who can fill high-demand jobs in high-tech enterprises.
WEAK LOCAL SUPPLY CHAIN
On the issue of the local supply chain, Panga noted that the lack of a strong domestic network for raw materials and components has forced manufacturers to rely heavily on imports.
To address this, he emphasized the need to further develop the electronics manufacturing services and semiconductor manufacturing services (EMS-SMS) supply chain. This would enable greater integration of local subcontractors and contract manufacturers, supporting the operations of new and expanding locator companies.
It could be noted that while the semiconductor/electronics manufacturing industry is the country’s largest dollar earner, it is also heavily rely on imports for their material inputs.
Currently, PEZA zones host major EMS-SMS players such as ASE Technology, Amkor, Texas Instruments, Analog Devices, Murata, and Semphil. These zones have positioned the Philippines as a key player in the ASEAN for Assembly, Testing, and Packaging (ATP)—a back-end process that completes the manufacturing cycle of high-end microchips.
“We are already an essential part of the global semiconductor supply chain. The Philippines is home to ATP processing firms as well as semiconductor companies that produce critical chips for automotive, medical, and appliance applications. Our role in the global semiconductor landscape is well established, with exports from PEZA forming a significant portion of the country’s total exports,” Panga said.
He added that the presence of these multinational companies in PEZA zones makes the Philippines an integral part of the global semiconductor supply chain.
However, to further strengthen the local supply chain, he urged these firms to bring in their suppliers and establish operations within PEZA. He also stressed the importance of attracting Tier 1 advanced microchip wafer production companies to set up in the country. Wafer fabrication, which is missing in the Philippine supply link, is the backbone of the electronics industry. The Philippines’ semiconductor is largely engaged in the intermediate and back-end process operations.
To encourage existing locators to integrate their supply chain into the EMS-SMS sector, Panga called for improvements in local supply and global value chains. This includes enhancing logistics, sourcing production-related materials, strengthening infrastructure connectivity, and ensuring competitive utility costs—all of which would encourage greater localization among ecozone locator companies.
INDUSTRY SKILLS
By building a robust domestic supply chain and industry-skilled workforce, Panga said the Philippines could attract semiconductor wafer fabrication and manufacturing firms that produce high-end chips for AI, 5G cellular technology, and electric vehicles enabling the Philippines to climb higher in the global supply chain.
“If we achieve this, it will create more demand for engineers and generate more local jobs. It will also encourage chip design firms to establish a presence in the Philippines. With this vision, we will elevate our role from primarily handling back-end processes—already critical to the supply chain—to high-end, cutting-edge chip production,” he said.
Panga reiterated that scaling up the number and capabilities of skilled workers, suppliers, subcontractors, and manufacturers in the Philippine EMS-SMS supply chain is essential.
By doing so, he said, local companies would achieve economies of scale and operational efficiency.
“This will allow us to attract more EMS-SMS investors and Tier 1 advanced microchip wafer production companies make them more competitive in the global supply chain,” he concluded.
