Shape up for bigger share of chip trade, PH told

Semiconductor chips are seen on a circuit board of a computer in this illustration picture taken February 25, 2022. — File photo by Reuters

SAN FRANCISCO — A possible invasion of top chip producer Taiwan by China is “concerning,” the chief of a Silicon Valley-based semiconductor industry association said here, while highlighting the need for more manufacturing hubs in other countries to ensure global supply chain resilience in case of such a scenario.

Such a scenario remains unpredictable, but countries like the Philippines should gear themselves to “take the big share of the pie” in any case, according to Ajit Manocha, chief executive officer of Semi.

Beijing regards Taipei as a renegade province subject to reunification, and has not ruled out the usage of force to put the island territory under its control. Taiwan broke away from the Chinese mainland in 1949 following its takeover by Mao Zedong’s communist forces.

“I think it’s as concerning as you can think,” Manocha said last week when asked about the potential conflict in the self-ruled island in an interview with Filipino and Japanese journalists as part of a reporting tour organized by the US State Department.

“But nobody can predict,” he continued. “You cannot control what will happen in Taiwan or when it will happen, but you can control to grow your own country and take [a] big share of the pie …  Assuming if that happens, then you are already in great shape. If it doesn’t happen, you also have done a good job of setting up a hub in your country.”

That being said, Manocha is encouraging chip companies to expand their presence in multiple countries.

“The risk of having everything in four or five countries around the world is becoming much higher because of the geopolitical issues, because of the climate issues,” Manocha said. “We want the industry to grow in multiple parts of the world, it will actually de-risk the vulnerabilities that we have.”

For now, the Philippine semiconductor industry primarily focuses on assembly, testing, and packaging, which are the final steps of the production.

The country has yet to have its own wafer fabrication plant or “fab,” which is the foundation for creating semiconductors.

But the former adviser of the Obama administration noted that building fabs without an existing semiconductor ecosystem will be challenging.

“Many countries, they come to me and they say, we want to start a way for fab. I personally don’t try to entertain that discussion, because building a fab is easy,” he said.

“Anybody can build a fab for $10 billion, but making a business out of that is not easy. For building a fab, going up the value chain, you need the entire ecosystem, which we don’t have yet in many countries,” he said.

Manocha noted that the Philippines already has an ecosystem for semiconductor production.

“I think it’s up to you to market yourself, your country (Philippines), to the industry,” he told Filipino reporters.

READ: Local chipmakers see 1% to 2% revenue growth in 2025

Electronic products like semiconductors constitute the biggest export category in the country, accounting for over half of the country’s exports last year. But in 2024, the country’s revenues on electronic product exports fell to $42.74 billion, down 6.4 percent from $45.65 billion in 2023.

READ: Blinken to boost US-PH ties in Manila visit

In 2024, former US Secretary of State Antony Blinken visited the biggest semiconductor plant in Muntinlupa City, expressing that the country will remain as a “priority partner” in semiconductor manufacturing. /das