RP semicon sees turnaround in 2010

MANILA, Philippines – Despite suffering a negative 8 percent industry growth in 2008, the country’s semiconductor and electronics manufacturing industry is expecting a slow recovery by the turn of this year.

Executives from the Semiconductor and Electronics Industries in the Philippines (SEIPI) said that global trends in the mobile device and automotive electronics sectors would likely drive the recovery of the local electronics sector.

For the first three months of 2009, the industry had already hit the bottom of the industry’s negative growth and that exports are starting to move up, albeit slowly, according to SEIPI Executive Director Ernie Santiago in a briefing Wednesday.

From December to January, exports grew to 0.76 percent, while January to February increased slightly to 1 percent growth. By March exports grew to 9 percent.

Santiago also noted that investments in local semiconductor companies for the first five months reached P1.8 billion pesos, amid a series of closures and layoffs from existing companies including Intel.

Santiago said local semiconductor firms are stocking up on raw materials, such as silicon wafers to prepare for expected demand for new electronic components from original equipment manufacturers of mobile devices.

He said there is a growing global demand for mobile phones and small form factor computers, such as netbooks and nettops.

Demand for automotive electronics in China, Europe and Japan is also growing.

However, much of the demand would still come from restocking for new inventory rather than actual end-user demand, he said.

“Inventory of device retailers has been moving so we’re expecting they’ll be looking to put new stocks,” Santiago added.

Still, the SEIPI executive said the industry would still be in the red until the end of 2009, largely due to the effects of the global economic crisis.

He said turnaround would start sometime in 2010.

“We’ve experienced downturns before and there’s always an upturn after a certain period. What the industry is doing now is to prepare for that,” Santiago said.

He added that global trends in the coming months would validate the industry’s performance.

Recent global reports such as those from Gartner showed that the worldwide semiconductor business would still remain gloomy, growing only $198 billion in revenues by the end of 2009 versus $255 billion in 2008. –Alexander Villafania, INQUIRER.net