Business Bayani PH

The United States is joining forces with the Philippines in a bid to diversify its semiconductor supply chain, marking one of the seven countries selected for collaboration under the CHIPS and Science Act. 

This initiative was announced by U.S. undersecretary for economic growth, energy, and the environment, Jose Fernandez, during a press briefing on January 30.

The Philippines, alongside Vietnam, Panama, Puerto Rico, and Mexico, has been identified as a strategic partner to receive funding from the U.S. government. The purpose is to enhance the local semiconductor industry’s ecosystem, creating a more favorable environment for American investors.

“We’ve picked seven countries, only seven countries to work with. And we pick those countries on the basis of their potential to support semiconductors, supply chains back home,” Fernandez explained, emphasizing the careful selection process.

A substantial $500 million has been allocated from the International Technology, Security, and Innovation (ITSI) Fund, with plans to disburse the funds over the next five years across the partner countries. 

Fernandez highlighted the fund’s primary role in catalyzing private investments and workforce development, ultimately fueling the expansion of the semiconductor sector.

“The ITSI Fund serves to galvanize private investments and workforce development, which at the end of the day will lead our efforts to expand the semiconductor sector,” Fernandez said, underlining the pivotal role of the fund.

Fernandez further disclosed that the U.S. government is anticipating recommendations from the Paris-based Organization for Economic Cooperation and Development (OECD). These recommendations will outline how the U.S. can contribute to fortifying the semiconductor sector in the Philippines.

For the Philippines, the electronics and semiconductor industry are crucial components of its economy, representing more than half of the country’s total export revenues. Notably, this sector has generated up to 2.5 million direct and indirect jobs, underscoring its significance in the nation’s employment landscape.

Highlighting the strong ties between the U.S. and the Philippines in the semiconductor realm, Fernandez pointed out that 60% of total investments in the Philippine semiconductor sector have originated from U.S. companies.

The CHIPS and Science Act, signed into law by the U.S. President Joe Biden on August 9, 2022, authorizes investments in exploratory and translational research. This funding aims to propel innovative ideas across all domains of science and engineering, reflecting the U.S. commitment to advancing technological frontiers.

As the collaboration progresses, the Philippines is set to gain, using support to boost its semiconductor industry and strengthen economic ties with the U.S. The funds and expertise are expected to not only improve the local industry but also impact the global semiconductor scene.◼