US CHIPS Act to Significantly Boost Philippine Semiconductor Industry

The US CHIPS Act is set to have a transformative impact on the Philippine semiconductor economy. As part of a broader strategy to diversify and secure the global semiconductor supply chain, the Philippines has been selected as one of seven key partner countries to receive substantial funding and support from the United States. 

The CHIPS and Science Act, signed into law by President Joe Biden in 2022, allocates $52.7 billion to enhance domestic semiconductor research, development, and manufacturing capabilities. In a bid to mitigate the risks associated with a highly concentrated global chip supply chain, the Act also extends support to strategic international partners, including the Philippines 

Key Investments and Initiatives 

Under the International Technology, Security, and Innovation Fund, the US has earmarked $500 million to be disbursed over the next five years to bolster the semiconductor sectors of partner countries. This initiative is expected to foster private investments, workforce development, and the expansion of semiconductor assembly, testing, and packaging facilities in the Philippines.

One of the major objectives is to train and produce 128,000 semiconductor engineers and technicians in the Philippines by 2028. Additionally, plans include establishing a lab-scale wafer fabrication plant, enabling local prototyping and design of semiconductor chips 

Strategic Importance of the Philippines 

US Commerce Secretary Gina Raimondo emphasized the Philippines' critical role in the global semiconductor supply chain during her visit to Manila. She noted the country's well-educated and youthful workforce, existing semiconductor infrastructure, and the potential for significant growth. Currently, the Philippines hosts 13 semiconductor assembly, testing, and packaging facilities, and Raimondo sees an opportunity to double this number. 

Raimondo also highlighted the strategic shift by US companies to diversify their chip supply sources. “US companies have realized that our chip supply chain is way too concentrated in just a few countries in the world,” she said. “This is a moment for growth. Your country has the talent, you have the expertise” 

Economic and Employment Impact 

The semiconductor industry is a vital part of the Philippine economy, accounting for over half of the country's total export revenues and employing approximately 2.5 million people directly and indirectly. The influx of US support and investment is expected to strengthen this sector further, enhancing its global competitiveness and economic contributions