Electronics sector likely missed $1-B investment target in 2011

MANILA, Philippines - The local electronics industry likely missed its $1-billion investment target in 2011 even as three large Japanese firms indicated plans to set up manufacturing facilities here, the Semiconductors and Electronics Industry of the Philippines Inc (SEIPI) said.

In an interview yesterday, SEIPI president Ernesto Santiago said based on available data, investment in the first 10 months of 2011 stood at only $570 million. Given this, he said it is highly unlikely that investments will reach $1 billion for the year. In 2010, investments in the electronics industry reached $2 billion.

However, Santiago disclosed that three major Japanese firms — Brother, Canon and Murata Manufacturing Co. Ltd — are investing here.

He said Canon’s investment is worth P20 billion, while Murata plans to put in P350 million. Brother has not disclosed the amount yet but is seen to be lower than that of Canon’s because it is only looking at half the size of Canon’s facility.

Canon is looking at a 20 hectare lot in Batangas as a possible site for its printer manufacturing facility. This investment will employ 4,000 people in the first year and will balloon to 6,000 after its third year once fully operational.

On the other hand, Murata will establish its Philippine subsidiary in Tanauan City, Batangas for the production of monolithic ceramic capacitors (MLCC) scheduled to commence in January 2013.

Murata said there has been growing demand in recent years for electronic components as a result of the increase in advanced functions in electronic equipment and the diversification and rise in the number of applications in smartphones and tablet PCs and such demand is anticipated to grow even further in the future.

In this environment, the firm said they have been examining the expansion of overseas production and the enhancement of their production base in order to meet their rising supply obligations. Consequently, they have decided to establish a new overseas production base in the Philippines in view of securing a stable and abundant work force and targeting emerging markets such as ASEAN.

During the same interview, Santiago said their exports will “snap back” this year, saying they will be able to regain the 20 percent drop in 2011.

“The industry is cyclical but we are in an upward direction,” Santiago said. Electronics exports slid in 2011 as the tsunami in Japan affected the supply of raw materials while the crisis in Europe and the United States dampened demand.