PH chip sector risks stagnation
Semiconductors are the Philippines’ top export, but the industry risks slipping into stagnation and falling further behind regional peers, as the government struggles to restore policy stability and strengthen investment support mechanisms.
This is according to Bing Viera, chair of the Semiconductor and Electronics Industries in the Philippines Foundation, Inc. (Seipi) and president and country head of Amkor Technology Philippines, one of the world’s largest semiconductor assembly and test service providers.
“This is what you call a zombie industry,” Viera said in an interview with the Inquirer, lamenting the lack of major new investments in the country’s semiconductor sector. In 2025, the Philippines’ electronics exports—most of which are semiconductors—reached $49.64 billion, growing 16.11 percent and outpacing earlier flat-growth forecasts made amid a challenging global trade environment.
Viera said the growth reflects sustained global demand for chips, but warned that the Philippines risks missing the next wave of investment as the industry shifts toward higher-value technologies.
The country’s semiconductor operations remain largely focused on older, mainstream products, produced by what Viera described as “Jurassic” technologies. But global demand is shifting toward high-performance chips used in artificial intelligence and electric vehicles.
Because of this technological gap, Philippine facilities remain heavily dependent on labor rather than automation. Of Amkor’s more than 30,000 employees worldwide, about a third are based in the Philippines.
Yet globally, legacy products now account for only about 18 percent of Amkor’s total revenue.
“We are just maximizing what we have already,” Viera said.
Unstable policy
A key concern for investors, Viera said, is policy predictability. Semiconductor factories are long-term “brick-and-mortar” investments that require continuity.
For years, he said, the Philippine Economic Zone Authority (Peza) provided that stability by offering a consistent framework for exporters operating inside economic zones. Amkor’s facilities in Muntinlupa and Laguna are both registered with Peza.
But reforms in recent years have created uncertainty over how the incentives regime will evolve.
These include changes under the Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy, popularly known as the CREATE MORE Act.
Under the law’s implementing rules, projects that were already entitled to income tax holidays and the 5-percent gross income tax regime before the incentives overhaul in 2021 may continue enjoying those perks only until Dec. 31, 2034.
After that, many firms are expected to transition to the regular corporate tax system, potentially exposing them to additional taxes such as real property taxes and other charges imposed by local government units.
Dying industry?
While these uncertainties are not driving companies to exit the Philippines outright, he said they are discouraging firms from committing new investments.
For semiconductor firms deciding where to place their next investments, those uncertainties can also tilt the balance toward competing manufacturing hubs.
Countries such as Vietnam and India have been aggressively courting semiconductor companies with clearer incentive frameworks and stronger government backing.
At Amkor, for instance, a $1.6-billion advanced packaging facility was recently built in Vietnam—an expansion that the Philippines had been considered for, Viera said.
“What we want is stability. That’s number one,” Viera said. “Policies should not change. It has to be very clear. No red tape, no under-the-table and all those things. Ease of doing business is very important.”
Beyond incentives, he also cited structural challenges—including high power costs, infrastructure gaps and weaknesses in the engineering talent pipeline—as barriers to attracting the next wave of semiconductor investments.
Without upgrades and new product lines, Viera warned, the country’s export-leading industry could gradually lose relevance.
