The global semiconductor industry powers countless devices in our daily lives, from smartphones and laptops to sophisticated medical equipment and electric vehicles. As competition intensifies worldwide, economies are seeking to secure their place in this critical value chain.
The Philippines has long established itself as a reliable player in the assembly, testing, and packaging (ATP) segment of semiconductor production. Electronics and semiconductors are the Philippines’ single largest export category, making up nearly 60% of its merchandise exports, ranking it ninth worldwide by chip exports.
To strengthen its position in the global value chain for semiconductors, several challenges need to be addressed. Labour productivity has room to grow, infrastructure needs upgrading, and the operational environment—though improving—remains complex. Moreover, global dynamics like supply chain shifts, higher demand for advanced packaging, and emerging technology applications call for a more strategic approach.
Addressing these challenges can unleash the Philippines’ untapped potential, attract new investments, create quality jobs, and help local firms climb the value chain. Below are seven actionable strategies.
1. Establish a clear, long-term vision and national strategy
A coherent national strategy is essential to guide investments, align policy efforts, and reassure stakeholders. While the Philippine government has already announced ambitions, and semiconductors feature in other plans like the Philippine Development Plan, a single, comprehensive semiconductor blueprint would help to demonstrate the government’s long-term commitment to the ecosystem. Communicating the Philippines’ vision for the semiconductor ecosystem, and developing policies to help reach them, will build investor confidence.
2. Streamline regulatory procedures and improve ease of doing business
Complex and time-consuming permitting processes can slow business growth and deter foreign direct investment. While the Philippines has enacted the Ease of Doing Business Act and established the Anti-Red Tape Authority, semiconductor firms still report delays in securing critical business permits and chemical licences. By making regulations more efficient, predictable, and transparent, the Philippines can develop and attract more high-value semiconductor projects and maintain investor confidence.
3. Address high energy costs and encourage renewable investments
Semiconductor manufacturing relies on stable, affordable energy. High electricity prices and occasional outages raise operating costs and put the Philippines at a disadvantage compared to regional competitors. As the industry and its clients increasingly factor environmental, social, and governance (ESG) criteria into sourcing decisions, access to renewable energy has become more important. With a stable and greener power supply, the Philippines can enhance its competitiveness while meeting both customer and investor expectations.
4. Invest in infrastructure and foster logistics competitiveness
Reliable logistics and freight services are pivotal. While manufacturing operations often rely on just-in-time production cycles, the Philippines’ archipelagic geography, limited road networks, and reliance on a primary major airport for air freight (Ninoy Aquino International Airport) pose challenges. Investments in roads, ports, and airports can significantly reduce costs and improve turnaround times. Take measures to ensure that semiconductor components, materials, and finished products move swiftly and cost-effectively from and to global markets.
5. Enhance R&D, innovation, and shared technology facilities
The capacity to innovate and move up the value chain is critical for sustaining long-term growth in semiconductors. The Philippines has taken promising steps by establishing shared facilities like ADMATEL, which offers advanced testing capabilities, and supports both firms and the wider semiconductor technical landscape. Building a robust innovation ecosystem will help the Philippines build on its ATP expertise and become a source of cutting-edge semiconductor innovations.
6. Develop demand-driven, industry-academia talent pipelines
A strong semiconductor industry needs a steady supply of skilled workers—from technicians to advanced engineers and integrated circuit designers. While the Philippines produces many STEM graduates, on-the-job training remains extensive because existing curricula may not perfectly match industry needs. A workforce ready to meet the challenges of advanced semiconductor manufacturing will help the Philippines secure more high-tech investments and sustain long-term industry growth.
7. Leverage international partnerships and diaspora talent
As semiconductor technologies advance at breakneck speed, the Philippines should tap into global knowledge networks. Sending instructors abroad for training, forging joint programmes with international universities, and leveraging the Balik Scientist Program to attract Filipino talent to return home can help fill knowledge gaps rapidly. By integrating global insights and talent into its ecosystem, the Philippines can accelerate skill-building, innovation, and competitiveness.
Moving forward: what’s next?
The Philippine semiconductor ecosystem stands at a pivotal moment. With the right policies, focused investments, and strategic industry-academia collaborations, the country can cement its status as a reliable global semiconductor hub. The seven strategies laid out in this blog form a cohesive blueprint: streamline regulations, improve infrastructure, invest in R&D, develop human capital, and embrace global partnerships.
Implementing these strategies requires close co-ordination among government agencies, industry leaders, research institutions, and educators. Each stakeholder has a role to play—policymakers can refine incentives; universities can update curricula; businesses can invest in training and technology; and civil society can advocate for the changes needed to ensure inclusive growth. Working together, they can shape a thriving Philippine semiconductor ecosystem for decades to come.
Learn more about OECD work on semiconductors
To learn more about the opportunities and challenges for the Philippines’ semiconductor ecosystem, read the full report on Promoting the Growth of the Semiconductor Ecosystem in the Philippines.
To dive deeper into semiconductor issues, we explain why a shared semiconductor taxonomy matters for global co-operation and supply chain resilience and invite you to explore additional OECD work on semiconductors, including through the Semiconductor Informal Exchange Network.