A worker operates the die attach machine at a semiconductor manufacturing plant in Manila, Dec. 10, 2008. — REUTERS

THE SEMICONDUCTOR and Electronics Industries in the Philippines Foundation, Inc. (SEIPI) said on Wednesday it now expects electronics exports to be flat after seeing a sharp decline in the first semester.

“We have revised our growth forecast from 5% for the year to flat, zero because realistically we’re down 7% (in the first six months). But we see a recovery in the third and fourth quarters. So that’s why we’re aiming for at least flat,” SEIPI President Danilo C. Lachica told reporters on Wednesday.

SEIPI data showed total electronics exports dropped by 7% to $21.19 billion in the January-to-June period from $22.78 billion in the same period in 2022.

Six sectors showed a decline in exports in the first half. This was led by automotive electronics which plunged 70.4% to $18.7 million, followed by office equipment (-44%), electronic data processing (-32.2%), telecommunication (-25.8%), semiconductor components/devices (-4.4%), and control and instrumentation (-0.9%).

On the other hand, some sectors recorded an improvement in exports, such as communication/radar (23.4%), medical/industrial instrumentation (20.1%), and consumer electronics (17.4%).

Mr. Lachica attributed the exports decline mainly due to geopolitical tensions, such as the US-China trade war.

“In the last quarter or so, we’ve been clobbered in terms of our electronics exports. In fact, at one point, we were 15% down compared to last year,” he said, noting that exports recovered in June.

Data from SEIPI showed that total electronics exports rose by 11.8% to $4.25 billion in the month of June.

Four sectors reported year-on-year growth led by medical/industrial instrumentation (34.9%), semiconductor components/devices (22.3%), communication/radar (19.6%), and consumer electronics (8.4%).

On the other hand, five sectors posted declines in June, namely automotive electronics (-54%), office equipment (-36.4%), telecommunication (-29.9%), electronic data processing (-29.2%), and control and instrumentation (-12.5%).

Mr. Lachica said SEIPI is still hopeful of a recovery in electronics exports in the second half.

“The demand is still there. We are hoping that the Thanksgiving demand and the Christmas demand will propel the recovery of the industry,” he said.

For the rest of the year, SEIPI expects most of its exports to go to neighboring countries, particularly in China and Hong Kong.

Mr. Lachica noted that the Netherlands replaced Germany as the top destination of Philippine electronics exports.

“In Europe, the biggest destination is now the Netherlands followed by Germany,” he said. — Justine Irish D. Tabile