The Philippines’ electronics exports declined by 6% in 2024, dropping to $43.7 billion versus 2023 on lower demand, primarily due to geopolitical factors and the industry’s reliance on imported materials, according to the Semiconductor and Electronics Industries in the Philippines Foundation Inc. (SEIPI).
SEIPI President and CEO Dan Lachica expressed cautious optimism for 2025, stating that the industry is expected to see flat growth despite the increasing importance of semiconductors and electronics in emerging technologies.
To strengthen the country’s position in the global supply chain, Lachica emphasized the need to enhance local production of semiconductor and electronics components.
“We need to step up our parts localization initiatives for semiconductor and electronics products,” he said.
Expanding Domestic Capabilities
Lachica stressed that the Philippines must expand its capabilities in assembly, test, and packaging (ATP), integrated circuit (IC) design, and electronics manufacturing services (EMS). Additionally, he urged the government and private sector to consider establishing a semiconductor wafer lab to advance the industry.
While the country has made progress in ATP and IC design, Lachica noted a significant gap in the semiconductor supply chain.
“What’s missing from this semiconductor supply chain is a wafer fab,” he said.
The Case for a Wafer Lab
Acknowledging that attracting a full-scale front-end semiconductor wafer fabrication facility remains a challenge, Lachica suggested that the country could establish a wafer lab instead. This facility would train local talent, support IC design prototyping, and develop the necessary ecosystem to pave the way for a future commercial wafer fab.
Heavy Reliance on Imported Materials
Lachica highlighted that the semiconductor and electronics industry accounted for over $27.37 billion in imported materials last year, underscoring the urgency of developing local capabilities to reduce dependence on foreign suppliers.
With global semiconductor demand continuing to rise, industry leaders believe that improving local production and investing in critical infrastructure will be key to ensuring the Philippines remains competitive in the global market.
