HOW the PHILIPPINES Became a LEADER in THIS Industry

Are you saying that Philippines is the reason why my laptop works? It's huge. One of the countries that has been playing a huge role in this space is the Philippines. The Philippines' role in the semiconductor industry are assembly, testing, and packaging. What? I believe that this is a way how some countries avoid being taxed if the assembly happens in the Philippines. Let's do this. What's up, Philippines? Welcome back. Welcome, welcome. Today, we're going to dive into economy of the Philippines. Very interesting topic though. There's so much happening in terms of companies investing in the Philippines, and this could be actually a very, very huge breakthrough for the Philippines. I believe. I don't know what this video is specifically about, but the title says, how the Philippines became a powerhouse And you would think, okay, think of assembly might be China, but you wouldn't think of the Philippines. So, I don't know. Let's find out. Very true. Yeah, and you're involved. Interesting. What? No, I don't know anything. What? Yeah. Mm-hmm. Okay, hold on. Knowing the certain taxes for imports, especially in the US, I believe that this is a way how some countries avoid being taxed if the assembly happens in the Philippines. Could be. Because that's so good with the US. Okay. I heard, yeah, we had that. We had that on the channel. Oh! Did they still do calculators? Like, what did they do? Mm-hmm. Interesting. Malaya. Yeah. I think, if I'm not mistaken, there's also a car assembly or car chip. I'm not sure if it's the chip, but it's something for cars assembled in Baguio for, I think, BMW or some German car brand. Oh, I just saw it. The logo is Texas. Cute. Mm-hmm. Yeah, which is very convenient. Wow. Ah, okay. They didn't want to calculate this. Mm-hmm. Yeah, I saw Intel and IBM and BGC. Cavita. Wow. Wow! That's a long time ago. Fair enough. Good job, Philippines. Mm-hmm. Wait! Hold on. Are you saying that Philippines is the reason why my laptop works? Like, literally being assembled there. It's huge. That's huge. Like, since the 70s? Wow. However, in the mid-2000s, as global manufacturing dynamics shifted, Intel eventually closed its Philippine facility in 2009 as part of a broader restructuring. While the closure was a setback, the experience and skills that Intel imparted to the local workforce continued to benefit the semiconductor industry. Many former Intel employees went on to work for other semiconductor companies in the Philippines, spreading the expertise they had gained during their time at Intel. By the 1980s, these two companies had helped grow the Philippine semiconductor industry. As electronics manufacturing became more specialized, global demand for semiconductors surged. The Philippines capitalized on this trend by positioning itself as a reliable hub for the assembly and testing of semiconductors. This has then brought in new foreign investors, such as Amcor Technology and Onsector. Okay, this topic is very, like, very dry, I would say. But super important, you know. And I'm learning so much, like, I didn't know this. Amcor played a significant role in advancing the local semiconductor supply chain by introducing cutting-edge ATP technologies and processes. These innovations included advanced packaging techniques, such as Ball Grid Array B, G, A packaging, which became critical for smaller, more powerful chips. ON Semiconductors, on the other hand now known as Onsemi, expanded its operations in the Philippines by acquiring the semiconductor business of Motorola in 1999. This acquisition included the assembly and testing facility in Carmona, Cavite. Over the years, Onsemi has invested significantly in upgrading the facility, making it a key part of its global supply chain. The company's operations in the Philippines focus on products used in automotive, industrial, and power management applications. Although the growth of the Philippine industry in the 1980s was dominated by foreign investors, there were also local players. One notable example is Integrated Microelectronics, INSI, I-M-I, a subsidiary of Ayala Corporation. Founded in 1980, I-M-I has grown to become one of the leading providers of electronics manufacturing services and semiconductor assembly in the Philippines. I-M-I specializes in producing automotive electronics, industrial electronics, and power semiconductor devices, and it has expanded its reach globally with facilities in various countries. As a homegrown company, I-M-I has been instrumental in building local expertise in semiconductor assembly and providing high-value services to multinational clients. The company's ability to meet global standards has positioned it as a reliable partner for semiconductor firms seeking quality manufacturing services in the Philippines. Now, during this period, the semiconductor sector began to dominate Philippine exports. Electronics and semiconductors became critical export products, contributing to the country's foreign exchange earnings and creating thousands of jobs. The assembly and testing work that the Philippines specialized in were labor-intensive but required technical skills, making the Philippines an attractive location for these operations. The establishment of more EPZs in places like Laguna, Cavite, and Cebu helped further solidify the country's reputation as a semiconductor hub. Unfortunately, by the 1990s, the semiconductor industry faced new challenges and opportunities. The global semiconductor market was becoming more competitive, with countries like China, Malaysia, and Thailand also making significant investments in electronics manufacturing. This increased regional competition pushed the Philippines to improve its infrastructure, workforce skills, and overall ease of doing business to retain foreign investors. The government responded by creating the Philippine Economic Zone Authority, PETSA, in 1995, which streamlined the processes for setting up export-oriented businesses and provided a more attractive investment environment. PETSA's efforts were instrumental in retaining existing semiconductor players and attracting new ones, such as Maxim Integrated and Analog Devices. Despite these efforts, the Philippine semiconductor industry remained largely focused on the assembly, testing, and packaging stages of semiconductor production. The country struggled to break into more advanced areas like chip design and wafer fabrication, which were dominated by countries with more robust research and development, R&D, ecosystems like Taiwan and South Korea. Nevertheless, the Philippines maintained its status as a crucial player in the ATP segment of the global semiconductor supply chain, and today, the semiconductor industry is massive. According to the Semiconductor and Electronics Industries in the Philippines Foundation, INKEEDS, CIP, electronics and semiconductors accounted for approximately 62% of the country's total exports as of 2022, with semiconductor products alone representing a significant portion of this figure to billions of dollars in export revenue each year. It directly employs around 3.2 million workers, including engineers, technicians, and production line workers. Even the US, which has long been a key partner in the development of the Philippine semiconductor industry, recognized the Philippines as a critical player in the global semiconductor value chain. But anyway, do let us know what you think. Thanks for watching. Yeah, Behind Asia has always super interesting videos and so insightful. I mean, I had no idea that Philippines plays such a huge role in like me being able to use my phone, me being able to use my laptop, driving my car, whatever. Knowing that like how much impact it actually has and how much companies are investing, they are there to stay. So, good for the Philippines, I guess. Let me know in the comment section down below what you think about it. I know this was a little bit of a dry topic today, but in my opinion, it's always good to know those things. Being part of conversations, I've been in a lot of interesting conversations about the Philippines and this was definitely a surprising fact that I learned today. If you learned something new today as well, consider subscribing. Or if you like something a little bit more fun, I have a very joyful content as well. And definitely hit the notification bell if you want to be notified for the next video. If you're going to travel, please check out my channel, Nelly's Life. And that was it for today. I'll see you guys next time here on What's Up Philippines? Bye! you