Philippines Integrated Circuit (IC) Market: Emerging Trends, Growth Trajectory, and Investment Opportunities

Source:
Makreo Research
Mumbai, August 18, 2023

The Philippines has maintained its position as a prominent global exporter, accounting for 2.8% of the world's total Integrated Circuit exports. The Philippines' key products are hard drives and semiconductors. With 10% of the world's supply of semiconductor manufacturing services, it provides 2.5 million hard drives each month. According to Makreo Research, Integrated Circuits, which are expected to account for a market volume of USD 5.53 billion in 2023, dominate the Philippine semiconductor market.

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The Philippine economy has showcased remarkable resilience among emerging nations in the aftermath of the pandemic. Notably, the country achieved a GDP growth rate of 7.6% in 2022 and continued this positive momentum into the first quarter of 2023. This consistent growth trajectory is expected to play a crucial role in the Philippines' aspiration to attain upper-middle-income status.

► The Philippines' Pivotal Contribution to Global Electronics Manufacturing Services and Exports:
The Philippines holds a prominent position in the realm of electronic manufacturing services, owing to several factors. Geographically, its strategic location serves as a pivotal gateway to the ASEAN market, facilitated by well-established maritime and air routes. The nation boasts a young, educated, and English-proficient population. It has carved a niche as a hub for electronics manufacturing services (EMS), specializing in intricate PCB assembly, box build, systems assembly, and expanding capabilities in design development and original design manufacturing (ODM). Noteworthy exports include hard drives and semiconductors. With a substantial share of the world's semiconductor manufacturing services and a monthly production of 2.5 million hard drives, the Philippines is a major player in the global electronics market.

The country is home to approximately 500 semiconductor and electronics companies, including seven of the top 20 chip manufacturers (such as Texas Instruments, Philips, Fairchild, and others) and four of the top five hard drive producers (including Hitachi, Toshiba, and Fujitsu). Diverse brands like Continental, Amkor, Tsukiden, IMI, EMS, and Ionics contribute to the production of sensors, communication radars, vehicles, and electronic goods. The Philippines also holds a significant share, exporting over 2.5% of the world's integrated circuits (ICs) and hosting major IC manufacturers like Texas Instruments, STMicroelectronics, and NXP.

► Major Electronic Manufacturing Clusters:
The electronics industry has been the cornerstone of the Philippines' economy since the 1970s, driving its exports. In 2022, the country's exports of "Electronic Integrated Circuits and Micro assemblies" reached a value of $28 billion, with semiconductors constituting 70% of all exports. Key electronics manufacturing clusters are situated in Metro Manila, Calabarzon, Cebu, and Northern/Central Luzon. The concentrated presence of these clusters facilitates the advantageous exchange of information and expertise.

► Philippines IC Market by Product Type:
In 2022, the Philippines' Integrated Circuit market was categorized by product type into Analog, Digital, and Mixed/Micro segments. The Digital market held the largest share, surpassing 70%, followed by Mixed/Micro and Analog. This growth in the Digital IC market can be attributed to factors like increasing vehicle sales, heightened demand for driving safety, investments by automakers, and other contributing factors.

► Growth Trajectory and Prospects:
The Philippines' Integrated Circuit Market has transformed from a fledgling industry to a significant global player, primed for continued growth. Driven by manufacturing excellence, government support, and a skilled workforce, the nation is poised for further success. Despite challenges like the ongoing semiconductor shortage, the Philippines is projected to exhibit a CAGR of 8.4% in its IC market between 2023 and 2028. By fostering research, technological advancements, and strategic partnerships, the Philippines can solidify its position as a hub for semiconductor innovation, particularly in areas like artificial intelligence (AI) and the Internet of Things (IoT).

► Key Initiatives by SEIPI
■ Paths: The Semiconductor and Electronics Industries in the Philippines Foundation, Inc. (SEIPI), comprising 350 international and Filipino-owned semiconductor and electronics firms, collaborates closely with the government. Together, they have introduced the roadmap PATHS (Product and Technology Holistic Strategy), outlining the sector's priorities for global market expansion over the next five years. SEIPI is also establishing the Science and Technology Center (STC) to bolster the IC Design industry's growth. Additionally, SEIPI's Industry 4.0 Technical Working Group (TWG) focuses on accelerating digital transformation among member companies.
■ Artificial Intelligence (AI) and Strategic Location: The emergence of AI algorithms on high-end chipsets, known as AI chips, has opened a new market segment. The Philippines' strategic position as a four-hour travel hub to major Asian countries positions it as a vital link in the supply chain.
■ Philippine Industrial Park (FPIP): The First Philippine Industrial Park (FPIP) in Calabarzon is designated as a special economic zone, attracting global leaders from diverse sectors due to its strategic location.

► Challenges
Despite growth prospects, the semiconductor market faces challenges, including supply chain disruptions caused by the semiconductor shortage, attributed to the COVID-19 pandemic, natural disasters, and geopolitical tensions.

► Scope of the Study
The research conducted by Makreo Research on the "Philippines Integrated Circuit Market Analysis Forecast (2018-2028) - Segmentation by Product Type (Analog, Digital, and Mixed/Micro)" offers a comprehensive and thorough examination of the market, taking into account a wide array of factors. The report employs a balanced approach by considering both qualitative and quantitative elements, ensuring a well-rounded analysis. By incorporating both qualitative insights and quantitative data, the study provides readers with a more comprehensive grasp of the Philippines Integrated Circuit Market. This approach transcends mere numerical data and incorporates valuable insights into consumer behavior, industry trends, and market dynamics. This all-encompassing method enriches the overall analysis, rendering the study an invaluable resource for individuals or organizations seeking to delve into areas like semiconductors, integrated circuits, Digital ICs, Analog ICs, Mixed ICs, and investment scenarios in the Philippines. Furthermore, the report's examination of historical and present performance, coupled with the exploration of potential growth prospects in the future, empowers readers to pinpoint critical areas of interest and investment opportunities.

► Period of Study
2018-2022 : Past and Present Scenario
2022: Base Year
2023-2028 : Future Outlook of the industry

► Market Assessment: The report examines opportunity for the Philippines Integrated Circuit market on various grounds including
■ Philippines Integrated Circuit Market revenue and performance,
■ Philippines Analog Integrated Circuit Market revenue and performance
■ Philippines Digital Integrated Circuit Market revenue and performance
■ Philippines Digital Integrated Circuit Market revenue and performance

► Countries Assessed Philippines

► Competitive landscape
Competitive Landscape
Mergers/Acquisition/Investment
Company Profiles

► Company's Covered
Amkor
Xinyx Design
Infineon
Tokai Electronics Philippines
Nexperia
Lattice Semiconductor
Analog Devices
ATEC
Inari Amertron
Makerlab

► For more information on the research report, refer to below link:
Integrated Circuit Market in the Philippines (2018-2028) - Size, Share, and Growth Forecast for Analog, Digital, and Mixed/Micro Circuits
https://www.makreo.com/report/integrated-circuit-market-philippines-2018-2028-size-share-growth-analysis-forecast

► Other Recent Published Report on Philippines:
Philippines Logistics and Warehousing Market and Forecast (2018-2028)
https://www.makreo.com/report/philippines-logistics-and-warehousing-market-and-forecast-2018-2028

Makreo Research and Consulting
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Contact us at:
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Email Address
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Makreo Research is a market research and consulting firm that works closely with business conglomerates worldwide to assist them in many aspects of driving their businesses.

This release was published on openPR.