Electronics Industry Prepares for Localization
The electronics industry's roadmap has called for an aggressive localization of its supply chain by increasing the local value added content and upgrading the industry's capabilities to wean this sector from being overly import-dependent.
Dan Lachica, president of the Semiconductor and Electronics Industries in the Philippines, Inc.(SEIPI), revealed this as the association of over 200 electronics companies mostly located in the country's export zones is set to submit an updated roadmap this week.
"We're motivated to localize the supply chain," said Lachica during the Trade and Industry Development discussion with the private sector.
According to Lachica, there are two ways to localize the supply chain. First is to increase the local value added content and the second is upgrade the capabilities of the local suppliers.
In an earlier interview, Lachica stressed that the domestic electronics industry as an interesting study of contrast. While it is the country's largest dollar earner, it has a low local value added. It has only a 30 percent local content and the Philippines is just a mere assembly point for intermediate electronics products. It is far from the heart of manufacturing.
Lachica came up with "DOSEMI" to reflect what the industry should be doing: "Drive up On Semiconductor Electronics Manufacturing Index".
Lachica explained that the local industry's capability has always been its topnotch manpower, but there is a need to drive up training, research and development, localizing supply chain, among others.
Localization requires identifying needs of members and matching with local capabilities, he said.
Localization of the industry was already incorporated in the earlier two SEIPI roadmaps: The Deloitte study in 2002 and the INEMI in 2010 but those targets did not materialize, Lachica noted.
There were lots of factors, too, that hindered the achievements of the objectives set under the earlier roadmaps. …