Electronics sector seen to grow 15%

The local electronics and semiconductor industry is expecting a 10 percent to 15 percent growth this year following a strong rebound in global demand for electronic products.

Semiconductor and Electronics Industries in the Philippines Inc. (SEIPI) president Norberto Viera said they expect the sector to bring in $27 billion in export earnings for the whole of 2004, or a growth of 10 percent compared to last year’s exports of $26.4 billion.

Latest reports showed that the global semiconductor industry is expected to post double digit growth this year as firms race to quench consumers’ seemingly endless thirst for the latest electronic gadgets.

Export earnings of the local electronic sector grew by six percent to $6.15 billion during the first quarter of the year.

Viera said the group is urging the incoming administration to address the industry’s three main concerns which are power, labor and infrastructure to help the industry achieve its growth target.

Viera warned, however, that the rebound is not expected to last and the sector may again experience a downturn from 2005 to 2008.

SEIPI, therefore, urged the incoming government to address the sector’s concern particularly on lowering power cost.

More specifically, the sector is urging the government to do away with the cross subsidies and implement the Electronic Power Industry Reform Act of 2001.

At present, industrial electric users subsidize residential electric users.

According to SEIPI vice president Arthur Young, cost competitiveness is a key factor in attracting and even maintaining multinational electronic firms already in the country.

He pointed out that while domestically, the industry projects a 10 percent to 15 percent growth this year, global growth projection is actually higher at 24 percent.

Thus, Young pointed out, the Philippines is actually underperforming.

However, he clarified that individual electronics and semiconductor firms in the country like Texas Instruments Amkor are posting much higher growth of 20 percent to 30 percent and even as much as 50 percent.

The government, thus, Young said, should take steps to ensure that they stay in the country since power cost in competitor countries such as China is much lower.

SEIPI is also urging for a more flexible labor law that would allow companies to tailor their working hours to their specific needs instead of adhering to a mandated eight-hour, six days a week schedule.

A more flexible schedule of 12-hour, four days a week routine, Young said, tends to improve efficiency and lower cost for the workers.