Apple contractor to ‘level up’ chip sector

MANILA, Philippines – Philippine electronics manufacturers are unfazed by Foxconn’s potential entry into the planned Pax Silica artificial intelligence (AI) hub in New Clark City, as they view the coming of the Taiwanese giant as an opportunity to upgrade the country’s technology and manufacturing capabilities.

Ferdinand Ferrer, president of the Philippine Chamber of Commerce and Industry (PCCI), said local firms expect Foxconn’s presence to create opportunities for domestic suppliers to participate in the production of AI-related hardware and data center equipment.

READ: Go: US keen on fast-tracking ‘top priority’ Pax Silica

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“We welcome that, and what we are working on is, hopefully, to improve the technology of the supply chain,” Ferrer told the Inquirer. “Our local supply chain or value chain related to the AI technology will level up.”

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As the Inquirer first reported, Foxconn is being eyed as the anchor locator for the 1,619-hectare Pax Silica hub in New Clark City, an AI-focused industrial enclave being developed jointly by the Philippines and the United States.

READ: BIZ BUZZ: Pax Silica may just land iPhone maker

In June, the Taiwanese electronics manufacturing giant—best known as Apple’s largest contract manufacturer—was preparing to send technical teams to inspect the site as part of its due diligence.

Ferrer, who chairs electronics firm EMS Group of Companies, said one of the more immediate opportunities for local firms would be manufacturing, assembling and packaging hardware used in data centers, including racks, boards, harnesses and related components.

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The longer-term objective, however, is for companies to move into codesign and codevelopment, although Ferrer said that process could take three to five years.

“Codesign and development, that’s where we will learn,” said Ferrer, who also serves as a trustee at the Semiconductor and Electronics Industries in the Philippines Foundation, Inc.

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He added that Foxconn typically evaluates how much of its requirements could be sourced locally, which could encourage homegrown suppliers to upgrade their capabilities and qualify for more sophisticated work.

READ: 50 firms keen on PH ‘Pax Silica’ hub

“Part of their advocacy is also to improve the local supply chain or value chain that can contribute to their business here or to their development here in the Philippines,” he said.

For Ferrer, the bigger opportunity is not simply attracting another multinational manufacturer, but using its presence to move the Philippine electronics industry further up the value chain.

“(This will) lift the technology and our capabilities,” he said.

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While Foxconn has yet to make a final investment decision, Finance Secretary Frederick Go, who also serves as the country’s investment czar, earlier said he expects the company to become the “single largest” investor in the Pax Silica hub if the project pushes through. INQ