US to aid Philippines in development of semicon industry

MANILA, Philippines — The United States is looking to work with the Philippines to grow its semiconductor industry as it identified it as among the seven countries to benefit from its $500 million program aimed at diversifying its semiconductor supply chain, according to an official of the US Department of State.

In a media briefing, US Undersecretary of State for Economic Growth, Energy, and the Environment Jose Fernandez said that the CHIPS Act of 2022 provides the US Department of State a portion of the law’s  $52 billion funding for it to create international supply chains that will help its semiconductor industry back home.

“The law provides (the US Department of State) $500 million over five years for us to use that for diversifying our international supply chain,” Fernandez said.

“We picked seven countries to work with. And we pick those countries on the basis of their potential to support semiconductors supply chain back home. The Philippines is one,” he said.

Other countries picked by the US Department of State for the program are Vietnam, Panama, Costa Rica and Mexico, among others.

In November, the US Department of State announced that it will collaborate with the government of the Philippines to explore opportunities to grow and diversify the global semiconductor ecosystem under the International Technology Security and Innovation (ITSI) Fund, created by the CHIPS Act of 2022.

Fernandez highlighted the potential of the Philippine semiconductor industry noting that it is the country’s top export and employs 2.5 million direct and indirect workers.

“And it’s really a unique example of the private sector taking advantage of some of the competitive advantages, and benefiting from some of the competitive advantages that the Philippines — a workforce that is eager to lead and serve the industry,” Fernandez said.

As part of its efforts to support the Philippine semiconductor industry, Fernandez said they  expect recommendations from the Organization for Economic Cooperation and Development (OECD) on how it can help strengthen the semiconductor ecosystem in the Philippines.

“When we get those recommendations, we believe that the Philippines can continue to be a leader and actually expand its semiconductor industry, which right now is thriving. So this was a major aspect of our conversations today,” Fernandez said, referring to his meetings with semiconductor companies in the Philippines.

US President Joe Biden signed the CHIPS Act of 2022 in August of the same year. The law that appropriated new funding to boost domestic manufacturing and research of semiconductors in the US.

The US Department of State said earlier that its collaboration with the Philippines would  help create a more resilient, secure, and sustainable global semiconductor value chain.

It said  that the initial phase would involve a comprehensive assessment of the Philippines’ existing semiconductor ecosystem and regulatory framework, as well as workforce and infrastructure needs.

“The insights gained from the assessment will serve as the basis for potential future joint initiatives to advance this critical sector,” the US Department of State earlier said.

It emphasized that the US and the Philippines are key partners in ensuring the global semiconductor supply chain can keep pace with the digital transformation underway worldwide.

“Manufacturing of essential products ranging from vehicles to medical devices relies upon the strength and resilience of the semiconductor supply chain. This collaboration between the United States and the Philippines underscores the significant potential to expand the Philippines’ semiconductor industry, to the benefit of both of our nations,” the US Department of State said.