MANUFACTURING. Semiconductor and electronics manufacturing operation of EMS Group in its facility in Laguna Technopark Inc. SEZ, Biñan, Laguna. The companies in this sector are relocating their investments from China and exploring opportunities in the Philippines. (PNA photo by Kris M. Crismundo)
TARLAC CITY — Department of Trade and Industry (DTI) Secretary Alfredo Pascual said the Philippines is benefitting from the policy of the United States government urging their companies to diversify their supply chain outside China.
“They (US firms) are exploring (the) Philippines as (an) alternative site. We hope that American companies will take the signal from their government how the US government looks at the Philippines now,” Pascual told Philippine News Agency (PNA) on the sidelines of the groundbreaking ceremony of Aboitiz InfraCapital's TARI Estate development here Tuesday.
Pascual made the comment on the back of the new USD1.6 billion investments of three semiconductor and electronics companies, two of which, including an American and a Japanese firm, are relocating their operations from China to the Philippines.
The US’ CHIPS and Science Act aims to diversify its semiconductor supply chain by strengthening the sector in the partner countries to make it conducive for US companies to invest in these nations.
In a recent interview, EMS Group chairman and chief executive officer Perry Ferrer said these US and Japanese semiconductor companies are partnering with EMS, with a combined investment of USD800 million.
Ferrer said the two companies pulling out their operations from China already invested USD150 million to USD180 million in the Philippines and will be completing the USD800-million investment package in two years.
The companies will create 2,500 to 3,000 jobs in the country once they start their full commercial operations by 2026.
Ferrer said the geopolitical issues between the US and China made these companies decide to pull out from the latter and transfer the operations to the Philippines, a long-time ally of the former.
He said with the recent policy of the US government to slap Chinese products with higher tariffs, China-made semiconductor and electronic goods become more expensive when entering the US borders.
“If they do not move, they might not have a market or it’s too expensive to bring it to the United States and their allied countries, then they will be losing their market eventually. But here, bringing it here, they are protecting their markets,” Ferrer added.
Another electronics company, which forms part of the supply chain of a big European consumer electronics brand, is investing USD800 million to set up a factory in Batangas.
The electronics firm is also partnering with EMS as its subcontractor.
Ferrer said this investment will start coming in by the second half of the year, and is expected to generate 5,000 to 6,000 jobs.
The firm will also transfer its operation from an Asian country but not China.
“Bringing that company to the Philippines, it will open up other opportunities for other products to be manufactured here. Because of the technology they will bring to the Philippines, we will be able to go to other wishlist customers,” Ferrer said.
Ferrer declined to name the three semiconductor and electronics firms that are transferring their production to the country.
He said these new investments of semiconductor and electronics firms will boost the country’s top merchandise exports.
“The new investments will enhance the capabilities of the supply chain and open other opportunities to attract investors. These chain of events will increase semiconductor and electronics exports,” he said. (PNA)
