The Philippine government is making a determined effort to persuade Texas Instruments Inc to locate a planned $2bn wafer fabrication plant in the country rather than in Thailand, according to local officials. Industry Secretary Jose Pardo said the US firm is still in the process of deciding where to locate the plant but a decision is expected within a month.
Acting on this, President Josef Estrada has sent a top priority bill to Congress which, if passed, would give a package of generous incentives to any company which invests more than $1bn in establishing the first wafer fab in the country. Included in the package is a 12-year tax holiday.
Texas Instruments is already a major investor in the Philippines and has a manufacturing facility for precision instruments located in the Baguio Export Processing Zone. Its exports from the Philippines last year were worth $1.5bn and the target for this year is $1.8bn.
The present back end assembly operations of Philippine-based IC manufacturers are not fully integrated because of the absence of a wafer fabrication plant in the country. The electronics sector accounts for approximately 70% of the country’s total exports, but partially due to the lack of a domestic wafer fab the local content of the products exported is only 30%.
