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US CHIPS law not expected to rule out foreign production

THE head of the US Semiconductor Industry Association (SIA) is exploring the Philippines as a hub, noting that a recent US law encouraging tech companies to re-shore their operations will not rule out overseas production.

SIA President John Neuffer met with Board of Investments (BoI) Managing Head Ceferino S. Rodolfo on Jan. 16 to discuss the investment landscape after the US passed the CHIPS Act last year.

The CHIPS Act offers $500 million in incentives for producing microchips in the US.

“While the CHIPS Act aims to increase the capacity of the US semiconductor industry, we recognize that we cannot do it all in the US. And that’s where countries like the Philippines have an opportunity,” Mr. Neuffer said.

“Rather than reshoring all manufacturing activities, it is more of rebalancing the supply chain. The pandemic has forced global businesses to rethink their supply chain strategies and consider diversification of suppliers to mitigate disruptions in their business operations,” he added.

SIA accounts for 99% of the US semiconductor industry in terms of revenue and also counts among its members two-thirds of non-US chip companies. SIA members operating in the Philippines include Analog Devices, Onsemi, and Texas Instruments.

According to the BoI, the majority of industrial parts and components are still sourced from Southeast and East Asia.

Mr. Rodolfo said that the Philippines is ready to accommodate semiconductor investors from the US.

“We, in the Philippine government… promote partnerships and enhancing local capacities and competencies in semiconductor manufacturing to deepen the country’s role in the global semiconductor supply chain and be able to further support US companies in their endeavors under the CHIPS Act,” Mr. Rodolfo said.

At the end of November, the Philippines exported $45.63 billion worth of electronics products, or 62.36% of the total, according to the BoI. — Revin Mikhael D. Ochave

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