The Philippine semiconductor and electronics industry expects a 9-percent to 10-percent contraction in export receipts this year as exporters continue to grapple with global headwinds and supply issues.
The Semiconductor and Electronics Industry of the Philippines Foundation Inc. (SEIPI) said during a board meeting Friday the decline was quite pronounced in September, where year-on-year electronics exports eroded by 9.13 percent. Exports in the first nine months also declined by 4.3 percent to $33.75 billion from $35.3 billion a year earlier.
“And if you extend that to the rest of the year, we’re probably going to be looking at $45 billion to $46 billion which is about 9 percent off the record from 2022’s $49.09 billion,” said SEIPI president Danilo Lachica.
He said the buildup in the current inventory and demand was lower than expected. Industry players, however, are looking forward to the coming year.
“So now you have excess inventory that has to be used up before you go back to normal production schedules,” said Lachica.
Lachica said the industry welcomes the government’s efforts to promote investments in the semiconductor and electronics sector specifically on higher and advanced technologies such a wafer fabrication.
The SEIPI through the Department of Trade and Industry (DTI) met with American counterparts at the sidelines of the recent Asia Pacific Economic Cooperation (APEC) summit in the US.
American companies encouraged the Philippines to come up with it version of the Chips Act.
The US Chips Act provides technical and fiscal support amounting to roughly $280 billion to strengthen domestic semiconductor manufacturing, design and research and reinforce America’s chip supply chains.
President Marcos, according to Lachica, led some discussions with two US semiconductor companies, encouraging both firms to invest in wafer fabs in the Philippines.
“The President mentioned that when he was talking to the corporate executives of these companies, but the companies expressed their concerns about the cost of operating in the Philippines,” he said.
SEIPI said bringing back the 5 percent gross income earned (GIE) taxation could be one of the best deals to convince US semiconductor companies to expand in the Philippines.
The President invited the US SIA Electronics Inc. to team with local companies.