U.S. To Fund Semiconductor Assembly Plants In Philippines

The United States will soon allocate funding for the "Creating Helpful Incentives to Produce Semiconductors" (CHIPS) Act specifically for the Philippines, as confirmed by visiting US Department of State Assistant Secretary Ramin Toloui during his two-day Manila visit.

State Department Assistant Secretary Ramin Toloui met with representatives from various sectors to strengthen RP-US ties to support shared economic goals. I Photo: U.S. Embassy in the Philippines X

The archipelago is the fourth stop in his official trip to Asia to deepen US economic ties with Japan, the Philippines, Singapore, South Korea, and Vietnam.

According to a PNA report, Toloui revealed that the ongoing study by the Organization for Economic Cooperation and Development (OECD) will assist the US in programming specific allocations to target priority areas under the CHIPS Act.

Recall that the Philippines is among the countries chosen by the US as partners under the CHIPS and Science Act, with the US government earmarking USD500 million for the International Technology, Security, and Innovation (ITSI) Fund to be spent over the next five years in partner countries.

The CHIPS Act seeks to diversify the US semiconductor supply chain by bolstering the sector in partner countries to encourage US companies to invest in them.

Toloui informed reporters that before the study is made public, the interim report's results will be used to make funding decisions, which should be available in the next couple of months.

He emphasized that the fund's purpose is to target a select set of priority areas crucial for catalyzing larger volumes of private sector investment in the semiconductor sector.

For the ITSI Fund, Toloui stated that the current priority activities for the semiconductor industry are assembly, testing, and packaging, areas where the Philippines has played a significant role in the downstream manufacturing component of the semiconductor supply chain.

While there has been interest in establishing wafer fabrication labs, Toloui noted that the timing must be appropriate.

The Philippines aims to attract investments in wafer fabrication plants to enable local industry to prototype integrated circuit (IC) designs. However, operating such labs entails significant electricity consumption, which could be challenging in a country with high electricity rates and power supply issues.

Additionally, Toloui shared that the US government has partnered with Arizona State University as an implementing partner for some of the CHIPS Act funding aimed at workforce development.