Electronics industry still reeling from costlier power

HIGH power costs continue to deter potential investments in semiconductor and electronics, according to industry executives.

Dan Lachica, Semiconductor and Electronics Industries in the Philippines Inc. (SEIPI) chairman, told a press conference on Friday that the country is losing out opportunities to neighbors such as Malaysia, Thailand and Vietnam, where investors find power costs more competitive.

He said a US firm that churns out solar cells and panels is looking for sites of four new factories in Asia wherein a multimillion-dollar investment would be poured into, but it has expressed concern that the cost of power in the Philippines is too high.

Industrial power rates in the country are second highest in Asia, next to that of Singapore. “There would be more investors if we can figure out a solution to high power cost,” Lachica said.

He said semiconductor and electronics exporters’ power expenses amount to millions of dollars, even as such comprise only up to 5 percent of total costs.

Lachica said the quality of the Filipino workforce, especially of engineers, is compensating for the uncompetitive power costs.

Several semiconductor and electronics firms would expand operations within the year, said Ernesto Santiago, SEIPI president, citing Texas Instruments’ planned expansion at Clark Freeport Zone.

Also, Lopez Group-led First Philec Solar Corp. is entering a joint venture with Nexolon of South Korea, said Lachica, who is the firm’s president and chief executive officer.

The joint venture called First Philec Nexolon Corp. would supply the
South Korean principal through a $100-million facility near First Philec’s Batangas plant. Six hundred people would be hired for this project, Lachica said.

Almost $2.3-billion worth of investments were infused into the semiconductor and electronics industry last year—the highest ever and almost five times larger than investments generated in 2009.

Under SEIPI’s 2011-2016 roadmap, the industry targets to secure $2-billion worth of investments annually starting this year.

Semiconductor and electronics account for about two-thirds of the country’s merchandise exports.
BEN ARNOLD O. DE VERA

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