SEMICON INDUSTRY URGED TO GO INTO CHIP DESIGN

Senator Edgardo J. Angara called on the electronics sector to move into high-value processes like integrated circuit (IC) design to better shield itself from price fluctuations in the world market.

Angara, Chair of the Senate Committee on Science and Technology, made the statement as the Semiconductor and Electronics Industries in the Philippines, Inc. (SEIPI) is expected to revise its 2011 export outlook in the face of contracting consumption from distressed Western markets.

"Our semicon industry has always been a major driver of growth via the export of electronic products. But we've focused too long on assembly and packaging that we are missing out on the vast potential of higher value-added businesses like chip design. We only need to look at the experience of our neighbors to see where the potential for investments truly lie," said Angara.

According to IHS Isuppli, a market intelligence and research firm, the Chinese fabless semiconductor market is projected to double by 2015, generating revenues of up to US$10.2 billion from increased domestic demand and sustained exports. The Indian Semiconductor Association (ISA) likewise predicted that its chip design industry will be worth US$10.2 billion by 2012.

The veteran lawmaker noted that Vietnam implemented various policies to develop its own semiconductor industry which included the establishment of the Quang Trung Software City (QTSC) and the Saigon Hi-tech Park (SHTP) as technology development centers. By late June 2011, SHTP attracted 53 projects amounting to almost US$ 2 billion, some of which involved semicon giant Intel.

"Significant amounts of investments are bypassing the Philippines, diverted instead to China, India and Vietnam. To remain a player in the global electronics market, we need to leverage the high-tech skills available and develop them further," said Angara, Chair of the Congressional Commission on Science, Technology and Engineering (COMSTE).

The senator noted that some Filipino companies are already making inroads in the manufacture and design of high-value electronics. He pointed out BiTMICRO that supplies solid state drives to global clients, and Ionics EMS provides 4G technologies for US telecommunications company Verizon Wireless.

"With the support of these companies, COMSTE has been pushing for the creation of an Industrial Research and Development Institute or IRDI, which will operate as a Public-Private Partnership focused on developing and commercializing more of these high-value electronics. Through the IRDI, all stakeholders will take part in steering our semicon industry into the future," explained Angara.