Electronics group keeps conservative 2018 target

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THE COUNTRY’s electronics industry association has kept a “conservative” but “robust and healthy” six percent target for export sales this year on the back of 2017’s recovery from 2016’s low base, according to the industry leaders on Tuesday, saying this year will see even more local inputs in their products.

“Industry outlook continues to be positive for 2018, with growth projected at six percent,” the Semiconductor and Electronics Industries in the Philippines Foundation, Inc. (SEIPI) said in a statement yesterday.

Latest Philippine Statistics Authority (PSA) data released on Friday last week showed electronic products accounting for 52.015% of total merchandise export sales last year with $32.704 billion, 11.2% more than the $29.418 billion shipped out in 2016 and slightly topping a 5-6% growth goal.

Outbound Philippine electronics sales in 2016, however, reeled from subdued global demand then, edging up just 0.114% from 2015’s $28.904-billion sales.

In a briefing in Makati City on Tuesday, SEIPI identified the top 10 markets for Philippine electronics last year as Hong Kong (21.56% of the total), United States (12.66%), China (12.61%), Singapore (9.97%), Japan (8.94%), Germany (6.29%), Taiwan (5.44%), Netherlands (4.09%), Thailand (3.54%) and South Korea (3.48%).

Office equipment, communication/radar equipment, electronic data processing, telecommunication and medial/industrial instrumentation were the top product categories.

While SEIPI now expects “the demand for electronic components will… increase,” the group’s president, Danilo C. Lachica, said in the press briefing: “[T]o go from a lower base to a higher base of $32.7 billion, percentage points is going to be a small number.”

“All in all, I think it’s a robust and healthy progression,” Mr. Lachica said of his group’s six-percent foreign sales growth goal for this year.

“Conservative admittedly, but we want to make sure that we deliver the numbers” he added, saying: “[W]e think it’s a good start.”

The sector is now looking to increase value added in its products.

Sunil Banwari, president and general manager of ON Semiconductor Philippines, Inc. and a member of SEIPI’s board of trustees, said in the same briefing that 62% of Philippine semiconductor and electronics products in 2015 was imported.

Describing that ratio as “a very high number,” he noted that “the number changed dramatically” in 2016, when local components accounted for “over half”. “We want to make sure that we can localize more,” Mr. Banwari said.

SEIPI plans to roll out this year its Product and Technology Holistic Strategy (PATHS) and road map that will identify top products and technologies that the industry will focus on in the next five years “in order to develop a niche in the global market, as well as the right conditions necessary to make this goal happen.”

PATHS’ implementation is expected to boost industry investments to $1.5 billion in 2020, $3 billion in 2025 and $5 billion in 2030, as well as increase export sales to $40 billion in 2025 and $50 billion in 2030.

Mr. Lachica said the industry is ramping up research and development (R&D) efforts, adding: “We’re going to work with the academe to churn out more PhDs.” This thrust will also involve setting up an integrated circuit design center, wafer fabrication facility and an R&D laboratory focused on electronics. — with inputs from Anna G. A. Mogato