Silicon Valley firm eyes move to RP

SAN JOSE, California (via PLDT) — A major US semi-conductor company based in Silicon Valley intends to put a "backward integration" of its electronic manufacturing operations in the Philippines, President Arroyo said here yesterday.

Officials of Cypress Semi-Conductor, which is involved in wafer fabrication, has plans to put a "major investment" in the Philippines, Mrs. Arroyo said, as a result of the round-table meeting she conducted here with CEOs of the top 200 Bay Area companies in San Francisco, California. She was told of these plans by company president TJ Rogers.

"Cypress is going to put up a wafer-fab in the country and that is, may I compare, like we have a steel industry that just produces galvanized iron and somebody is going to put up the slabs," she said.

She noted that Cypress’ plans represent a "deepening of the electronics industry. So I think that is a major investment. It’s not so much how much (investment infusion) but the fact that it’s the backward integration, we go to the more basic materials."

The President, assisted by Trade and Industry Secretary Manuel Roxas II and Board of Investments chairman Gregory Domingo, talked with the Semi-Conductor Industry Association and the American Electronics Association Member Companies at the roundtable conference.

Pressed as to how much this US firm will invest in the Philippines, Mrs. Arroyo and Roxas declined for now to reveal it, citing that official announcements should come from the company’s owners.

"Of course a wafer-fab unit is very capital-intensive. It requires big capital. I do not know how much they mentioned, but that’s really big capital," she said.

One company usually only has one or two wafer fabrication units, though "we have semi-conductors all over the world. This is really a move forward. It should be backward because it is backward integration, but forward economy-wise," she added.

The President asked Roxas to make public certain information that can be released for now until these new investment deals are formalized.

"The companies ... did not want the government to announce these interests at least until they have, for example, spoken to their partners or actually gone through their board decision-making process," Roxas said.

For now, the Department of Trade and Industry (DTI) and the BOI can only release the list of company CEOs who met with Mrs. Arroyo. Among those who told the President of their respective firm’s plans to invest in the Philippines are Richard Swanson of Sunpower Corp.; William E. Mitchell of Solectron Global Services; John Brennan, CEO of ICT Group; and Chuck Williamson, chairman and CEO of Unocal Group.

Like Cypress, Sunpower also has its eye on establishing a wafer fabrication unit in the country. Solectron and ICT Group have started initial operation of their respective call centers, which are expected to generate 3,000 new jobs over the next three years.

"Owing to the Philippine entrepreneurial spirit and being the third largest English-speaking nation in the world, and having the best and largest pool of knowledge workers, as well as a cost-competitive telecommunications infrastructure, the country today has energetic ICT (information and communication technology) industries with some areas of great potential that can be turned into our nation’s niche within the global ICT market," she said.

Mrs. Arroyo noted that "it is no wonder that the largest chip-making companies in the world – Intel, Texas Instruments, Amkor Annam – have stayed on and are quietly reaping the benefits of our talent pool."