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Electronics industry could surpass growth target this year

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REUTERS

ELECTRONICS EXPORTS growth this year could exceed the initial target if supply chain limitations are resolved, the industry group’s top official said.

Semiconductor and Electronics Industries in the Philippines, Inc. (SEIPI) President Danilo C. Lachica told ANC on Monday that the industry group had accounted for the ongoing global chip shortage when it set the 7% growth target for 2021.

“We’ve factored that in. And if anything else, getting a reprieve on the limitations that we’re facing today could even translate to higher growth for 2021,” he said.

A global shortage of semiconductor chips has led to supply chain constraints among local electronics manufacturers that are dealing with long lead times for manufacturing equipment deliveries.

Equipment production slowed down during the pandemic, Mr. Lachica said, delaying reaction time to increased demand in consumer electronics and a rebound in car sales.

“We import wafers which are needed for the assembly, test, and packaging of semiconductors, which eventually translates to the chips needed by our electronics manufacturing services,” he said.

The semiconductor wafer shortage caused by limited equipment capacity reduced the local industry’s ability to cope with increased global demand, the SEIPI official added.

Mr. Lachica said it would take a year before the industry could match global demand.

Local pandemic-related concerns have also impacted the industry, including travel restrictions barring foreign engineers from entering the country.

The industry set a 7% growth goal for the year due to an expected rebound in demand in the industrial, mobility, consumer, and medical electronics sectors.

At its growth rate so far, the industry could fall short of 2019 levels by the end of the year, Mr. Lachica said.

“However, if we get an upside in materials deliveries and stability in our supply chain and resources, we could pretty much eclipse our 2019 numbers,” he said.

Electronics exports grew by 62.6% to $3.22 billion in April, making up 68.5% of manufactured goods exports and 56.4% of total exported goods.

Electronics exports fell by 8.8% to $39.67 billion in 2020, versus the pre-pandemic forecast of 5% growth. — Jenina P. Ibañez



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