SEIPI think tank to identify new revenue sources, growth market

MANILA, Philippines - The Semiconductor and Electronics Industries in the Philippines Inc. (SEIPI) plans to establish its own think tank by mid-2014 to draft roadmaps for the industry’s future growth path.

The research body would be tasked to identify new and alternative sources of revenue streams as well as pinpoint emerging niche markets for cultivation, hoping this would help boost flagging exports, according to Andrew Wilson, industry development analyst with SEIPI.

The think tank’s findings are expected to be submitted by yearend, added Wilson, who spoke at an exporters’ forum held Feb. 24 at the Bangko Sentral ng Pilipinas (BSP) offices in Manila.

This development comes in the wake of a five percent decline in semiconductor and electronics exports in 2013, contrary to SEIPI’s earlier predictions of a five percent growth which it was forced to downgrade late last year.

The volume fall was mainly due to the continued weakness in global demand for semiconductors which account for 76 percent of the sector’s total shipments, SEIPI and BSP data show.

But SEIPI is more optimistic about this year’s prospects, projecting the industry to rebound with a five percent growth as the automotive and consumer electronics market continues to recover, demand from the fast-growing telecommunications industry rises, and new investments start to come in.

The industry is also banking on the improving economies of the United States, Europe, and Japan to boost orders from overseas.

SEIPI said that while demand for automotive and consumer electronics was on an uptrend last year, that for semiconductors had been flat for the most part of 2013.

It is encouraging industry players to move to higher-end market niches and growth sectors, such as consumer products like smart phones and tablet computers, medical equipment, and electronic parts for automotive applications.

At the same time, the association appealed for more government support for the industry, which continues to be the country’s biggest exporter with a more than 40 percent share of all merchandise exports.

SEIPI officials in earlier interviews said there were four constraints to the semiconductor and electronics industry’s recovery: expensive low-quality power, poor infrastructure, high cost of labor, and removal of government subsidies.

Government measures such as daytime truck bans are also deterrents to the industry, causing delays in shipment and operating losses, as are the high port charges and fees, the group said.