The United States wants to help the Philippines double its semiconductor capacity to reduce the geographic concentration of the global chip supply chain, Trade Secretary Gina Raimondo said Tuesday at an economic forum in Manila.
The comments came following the announcement of a trade mission led by Raimondo 1 billion dollars in investments by US companies in the Philippines. The trade chief, similar to U.S. Secretary of State Antony Blinken, has sought to encourage countries in Southeast Asia to increase investment in chip manufacturing and related industries at a time when much of that business still takes place in Taiwan, China and South Korea .
“U.S. companies have realized that our chip supply chain is far too concentrated in just a few countries in the world,” Raimondo said. “Forget geopolitics, with this focus you know the old adage is: don’t put all your eggs in one basket. Why do we allow ourselves to buy so many of our chips from one or two countries? That’s why we need to diversify.”
The Biden administration has sought to reduce U.S. dependence on just a few Asian countries for much of its chip supply while imposing sanctions to curb the advancement of China’s technological capabilities and tensions over Taiwan intensify.
The self-governing island, which China claims as its territory and is home to giant Taiwan Semiconductor Manufacturing Co., produces a lion’s share the world’s most advanced semiconductors along with South Koreawhile mainland China is a major supplier of more mature so-called products Legacy chips.
Electronics makers and chipmakers, including TSMC, have sought to diversify their operations into regions such as North America, India and Southeast Asia. The Philippines has 13 semiconductor assembly, testing and packaging facilities and Raimondo said: “Let’s double that.”
She gave no details on how the U.S. could help, other than to say it was an attractive target for U.S. corporate customers. The Southeast Asian country is rich in key minerals, she added, and companies are internationally seeking to make their supply chain more resilient.
“Right now there is a moment in the supply chain of your country and the entire region,” Raimondo told Filipino leaders. “I think you’re at the top of the list.”