about seipi - asean

THE
PHILIPPINE
ELECTRONICS
INDUSTRY
-
T HE
DRIVER OF T HE
P HILIPPINE E CONOMY
1. ABOUT SEIPI
2. THE PHILIPPINE
ELECTRONICS INDUSTRY
2.1
2.2
2.3
SEIPI
WHERE IT HAS BEEN
WHERE IT IS NOW
WHERE IT IS GOING
A BOUT
SEIPI
SEIPI
SEMICONDUCTOR & ELECTRONICS INDUSTRIES IN THE PHILIPPINES INC.
ABOUT SEIPI

The leading and largest organization of
more than 250 foreign and Filipino
semiconductor and electronics companies in
the Philippines (including its allied and
support industries)

Its membership include leading global
players like Texas Instruments, Hitachi,
Toshiba, Sharp, Samsung, Analog Devices,
Amkor Technologies, Sunpower, Cypress,
Moog, Fairchild, Maxim, Continental Temic,
Lexmark, Rohm, and Filipino companies
such as IMI, Ionics, Fastech, First Philec, etc.
SEIPI
Source: SEIPI
ABOUT SEIPI
 THE INDUSTRY IT REPRESENTS
- accounts for 2/3 of the total Philippine exports
SEIPI
-
directly employs more than half-million engineers,
technicians and operators
-
invest an average of US$ 1 B annually
-
provides the transfer of best global practices
on high-technology manufacturing
Source: SEIPI
ABOUT T HE
P HILIPPINE
E LECTRONICS
I NDUSTRY
WHERE IT
HAS BEEN
TOTAL PHILIPPINE EXPORTS
1995-2010
Philippine Exports WITH Electronics
SEIPI
Source: NSO
TOTAL PHILIPPINE EXPORTS
US$ BILLIONS
1995-2010
$55
$50
$50
$40
$39
$38
$35
$35
$30
$20
$49
$47
$45
$25
$51
$32
$41
$38
$35 $36
$29
$25
$20
$17
$17
$15
$11 $12
$10
$10
$5
$11 $11 $11
$12
$10
$19
$20
$20
$16
$12 $13
$10
Philippine Exports WITHOUT Electronics
$0
1995
SEIPI
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
Source: NSO
CHANGING FACE OF
PHILIPPINE EXPORTS
Forest Products - 10%
Others - 2%
Other
Manufactured
Products – 10%
Garments - 7%
Agro-Based
49%
ELECTRONICS - 3%
Mineral Products 18%
1970
Construction Materials - 0.49%
Home Furnishings - 1%
Motor Vehicles and Parts - 1.74% Marine Products - 1%
Food - 2.9%
Giftwares - 0.45%
Wearables - 0.16%
Organic Products - 0.18%
Machinery and Transport - 4.4%
Garments and Textiles - 6%
Mineral Products - 2.1%
Others - 13%
ELECTRONICS 58%
2009
….FROM COCONUT CHIPS TO MICROCHIPS
SEIPI
Sources : DTI/NSO
THE TOP CHIPMAKERS
SEVEN OUT OF THE WORLD’S TOP 20 CHIPMAKERS
ARE OPERATING IN THE PHILIPPINES
TIPI
Analog
SEIPI
Philips
Sanyo
Fairchild
On Semi
Rohm
Source: SEIPI
THE WORLD’S
TOP ELECTRONICS FIRMS
 FOUR OF THE LARGEST HDD PRODUCERS
ARE IN THE PHILIPPINES
Hitachi
Toshib
a
Fujitsu
NEC
 CEBU MITSUMI – employs >20K, biggest
employer in the Philippines; manufactures
computer peripherals and components such
as CD-R, CD-RW, optical pick up
SEIPI
Source: SEIPI
THE WORLD’S
TOP ELECTRONICS FIRMS
 AMKOR – employs 8,000 people for its IC
packaging with 400 formats, from leadframe to
BGA solutions
 EPSON – employs 5,000, one of the top 3 terminal
printer production base of global Epson group,
producing its 10 millionth printer recently
 LEXMARK – produces 40 million printheads/year
SEIPI
Source: SEIPI
HOMEGROWN SMS & EMS FIRMS
IMI
Ionics
PSI
Fastech
Team
… and a cluster of homegrown ODMs time recorder,
avr, power supplies, alarm systems, electronic
ballasts, testers, gps tracking, automated toll
collection, others
SEIPI
Source: SEIPI
A GROWING BASE OF SUPPLIERS
FOR HARD DISK DRIVES (HDDs)
Magnet
Actuator
Motors
Diodes
PCB/
PCBA
Spacer
Ring
ICs
Plastic
Molded
Parts
Resistors
Packaging
Materials
Coils
Connectors
Capacitors
Magnetic
Head
Transistors
Screws
Base
&
Cover
Carriage
Assembly
Metal
Pressed
Parts
…SUPPLYING THE WORLD WITH 2.5 MILLION HDD PER MONTH
SEIPI
Source: SEIPI
TEST AND PACKAGING DESIGN
Strong in assembly, test and packaging design
for semiconductor manufacturing services…
DSPs
Microprocessors
Flash Memory
Analog Devices
Memory Chips
Logic Devices
Power Devices
Opto Devices
…CAPTURING 10% OF THE SMS WORLD SUPPLY
SEIPI
Source: SEIPI
COMPETITIVENESS OF THE
ELECTRONICS INDUSTRY
CRITICAL MASS OF GLOBAL PLAYERS
SEIPI
Source: SEIPI
THE COMPANIES IN THE
ELECTRONICS INDUSTRY
Japan
30%
NATIONALITY:
- 72% Foreign
- 28% Filipino
Others
8%
Korea
10%
USA
9%
Philippines
28%
Europe
7%
Taiwan
Malaysia
Singapore
4%
2%
2%
NUMBER OF FIRMS: 959 COMPANIES
SEIPI
Sources: BOI/PEZA
LOCATION OF
ELECTRONICS COMPANIES
Northern/
Central Luzon
3%
Calabarzon
48%
Metro Manila
42%
Cebu
7%
SEIPI
Sources: BOI/PEZA
PROFILE OF TYPICAL
ELECTRONICS COMPANIES
ISO Certified
Practices the Best Known Methods
in Manufacturing (JIT,TQM, 5S, QPIC)
Capabilities Range from IC Packaging,
PCB Assembly, Full Product Assembly
In-house Training Capability
Runs at 3 Shifts a Day
Better Compensation Package
Non-Unionized with Low Turnover
Located in Economic Zone or BOI Registered
Operates with clean rooms and fully
integrated manufacturing facilities
SEIPI
Source: SEIPI
COMPETITIVENESS OF THE
ELECTRONICS INDUSTRY
PEOPLE
SEIPI
Source: SEIPI
STRENGTHS OF FILIPINO
ELECTRONICS WORKERS
AVAILABLE
TRAINABLE &
TECHNICALLY
CAPABLE
- a labor force of 36 Million
- about 100,000 engineering
and technical graduates
every year
- need only 6-8 weeks
to learn technical skills
COST COMPETITIVE FLEXIBLE
Functional Head - US$ 38400-73386/annum
Production Engineer - US$ 3466-10066/annum
Production Operator - US$ 1980- 3869/annum
SEIPI
- Multi-skilled, English speaking
- Operates at 3 shifts /day
- Minimal turn-over rate
Source: SEIPI
THOUSANDS
DIRECT EMPLOYMENT
OF THE INDUSTRY
600
2010:
FIRST TIME > 500K DIRECT JOBS
500
460
402
400
438
476
500
435
376
300
250
280
315 307
335 346
220
200
160
120
100
74
80 90
0
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
For every one direct job, 7 indirect jobs are created
SEIPI
ELECTRONICS EXPORTS
US$ BILLIONS
1992 - 2010
35
2010: THE HIGHEST IN HISTORY
31.1
29.60 31
28.50
27.30
27.07
26.64
25.34
24.17
23.76
22.20
21.60
19.87
30
25
20
14.98
15
10.61
10
5
7.55
4.89
3.78
2.97
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
SEIPI
Sources: National Statistics Office
Bureau of Export Trade Promotion, DTI
DESTINATIONS OF
ELECTRONICS EXPORTS
EUROPE-22%
USA-14%
JAPAN - 15%
CHINA - 13%
OTHER ASIA - 36%
EXPORTS DESTINATIONS:
SEIPI
US/EU - 36%
ASIA - 64%
Source: Bureau of Export Trade Promotion, DTI
INVESTMENTS
US$ BILLIONS
HISTORICAL: 1992-2010
2.50
2010: THE HIGHEST IN HISTORY
• 7TH TIME OVER US$ 1B
2.16
2.27
2.00
1.47
1.50
1.40
1.29
1.24
1.08
1.00
0.79
0.67
0.78 0.75
0.72
0.44
0.50
0.22
0.42
0.47
0.27 0.23
0.04
0.00
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
SEIPI
ABOUT T HE
P HILIPPINE
E LECTRONICS
I NDUSTRY
WHERE IT
IS NOW
ELECTRONICS EXPORTS:
US$ M ILLIO N S
January 2009 – June 2011
3 ,478
3,500
2 ,9 8 9
2 ,9 0 4
2 ,8 62
3,000
MoM: 17.21%
YoY: -23.89%
CGR: -10.82%
2 ,9 87
2 ,55 4
2,500
2 ,416
2 ,2 5 0
2 ,162 2 ,14 8
2 ,072 2 ,18 3
1,94 8 2 ,0 5 8
2 ,0 3 4
1,811 1,915
2,000
1,8 81
1,6 8 4
1,62 0
1,3 52
1,500 1,3 4 5
2 ,3 3 3
2 ,2 56
2 ,2 3 8
2 ,211
2 ,14 2
2 ,015 1,959
1,8 8 6
1,000
500
0
Jan Feb Mar Apr May Jun
2009
SEIPI
Jul Aug Sep Oct N ov Dec Jan Feb Mar Apr May Jun
2010
Jul Aug Sep Oct N ov Dec Jan Feb Mar Apr May Jun
2011
Source: NSO
ELECTRONICS IMPORTS:
January 2009 – May 2011
MoM: +0.60%
YoY: +11.24%
CGR: +20.14%
2009
SEIPI
2010
2011
Source: NSO
ELECTRONICS INVESTMENTS
1992 – Jan-Jun 2011
Jan-Jun 2011: US$ 530M
Source: PEZA
YEAR 2011 PROJECTION
FROM MODERATE TO
FLAT TO NEGATIVE
GROWTH
• Japan Supply Chain
Disruptions
• US/EU Debt Issues
• Middle East/Libya Crisis
SEIPI
Source: SEIPI
ABOUT T HE
P HILIPPINE
E LECTRONICS
I NDUSTRY
WHERE IT
IS GOING
BUSINESS ENVIRONMENTAL SCAN
 Several large multinationals
are revisiting their long-term strategies
and are making decisions now.
 There’s a growing sentiment to reassess
their geographical footprint in Asia.
SEIPI
BUSINESS ENVIRONMENTAL SCAN
 However, it is also clear that China is not the
only player.
 The China + + strategy is likewise still in play.
 Vietnam is very popular. Malaysia continues to
have the right infrastructure. Indonesia is
gearing up.
 The Philippines is in a very good situation to
be part of the action. The timing is now!
SEIPI
INDUSTRY OUTLOOK
Given this business condition, the
industry is bullish to sustain, if not
further increase the growth of the
semiconductor and electronics in the
Philippines
Moreover, there is growing optimism
driven by the general industry feeling
that the new government of President
Aquino is morally upright and is full of
promise
SEIPI
THE INDUSTRY TARGET
The industry aims to double-up
electronics exports
From US$ 22 Billion in 2009
To US$ 50 Billion in 2016
SEIPI
INCREASING INVESTMENTS
ANNUAL TARGET OF US$ 2 BILLION
PROMOTE THE PHILIPPINES
AND THE GREAT FILIPINO
ELECTRONICS WORKERS
SEIPI
DEVELOPING TECHNOLOGY ROADMAP
MANUFACTURING
PACKAGING, ASSEMBLY, TEST, WIRE
BOARD, RF COMPONENTS, POWER
MANAGEMENT, ETC.
MASS DATA
STORAGE
PV/SOLAR
AUTOMOTIVE
ELECTRONICS
SEIPI
R&D
LOWER COST OF BUSINESS
LOWER COST OF POWER
SEIPI
A CONDUCIVE BUSINESS ENVIRONMENT
• INFRASTRUCTURE
• SECURITY/
PEACE AND ORDER
• NON-DISRUPTIVE
LABOR
• CONTINUE WHAT
HAS BEEN GIVEN
SEIPI
PUBLIC-PRIVATE PARTNERSHIP
THE ELECTRONICS INDUSTRY WORKING
IN PARTNERSHIP WITH THE GOVERNMENT
• THE INDUSTRY
TO ACT AS DRIVER
• THE GOVERNMENT
TO ACT AS ENABLER
SEIPI