TRADE Secretary Alfredo E. Pascual said he invited US chipmakers to set up wafer fabrication plants in the Philippines.

Speaking before a roundtable session at the Asia-Pacific Economic Cooperation (APEC) Summit 2023, Mr. Pascual said: “Within the semiconductor sector, the US, particularly through partnerships and support from the Semiconductor Industry Association (SIA) and the Semiconductor Equipment and Materials International (SEMI), stands out as a pivotal ally.” 

He said in an online briefing that he touted the Philippines’ advantages, which include strong economic growth, pool of young talent competitive business environment, strategic market access, and robust government support.

“We made a presentation to them and highlighted the fact that the Philippines is already very active on the back end of the semiconductor value chain because a lot of outsourced semiconductor assembly and testing (OSAT) is happening in the Philippines,” Mr. Pascual said at the online media briefing on Wednesday.

He added that on the front end, the country is also seeing an increase in the number of companies engaged in integrated circuit (IC) design.

However, despite the projected growth in OSAT and IC design industries, he said that the Philippines is still missing processes like wafer fabrication, where the facilities are known in the industry as fabs.

“In between is what is called the wafer fabrication that we don’t have yet in the Philippines. Taiwan semiconductor manufacturing companies supply a large share of the wafers sold globally,” he said.

Mr. Pascual said Philippine ambitions to enter fab industry have grown as the industry strives to avoid potential disruptions to the wafer supply originating from Taiwan.

“There are factories going up in the US and Singapore. Given that situation, we might start a wafer fabrication (hub) on a sort of pilot basis to be able to demonstrate that we can do it and to be able to complete the (semiconductor) value chain,” he said.

“But we will continue to work on attracting more investments on the OSAT side of the business as this is where we have established a strong track record,” he added.

Mr. Pascual said the Department of Trade and Industry is still identifying potential partners for wafer fabs, which may include smaller Taiwan producers.

“We are still identifying potential partners. We found out that there are other smaller players in Taiwan that we can tap. Right now, wafer fabrication operations are mainly in Taiwan,” he said.

“There are smaller producers in Taiwan that we might try to access and see to what extent we can partner with them, without giving up on the possibility of a major investment that might involve the bigger producers,” he added. — Justine Irish D. Tabile