Posted in BusinessWorld Online, April 21, 2005
http://itmatters.com.ph/news/news_04212005a.html
RP-Based Electronics Giants Push R&D
Philippine-based high-tech firms plan to put up a research and development facility for a wider variety of electronics and semiconductors products that can be sold overseas.
This move is aimed at broadening the product portfolio of local electronics and semiconductor firms in a bid to weather the expected downturn this year in the said sector.
The Advanced Research and Competency Development Institute (ARCDI) said it will fund and market inventions in the areas of hardware, software, as well as wireless communications, control and instrumentation, automotive electronics, mechatronics, and design.
Cesar L. Quiazon, ARCDI executive director, said that this initiative aims to help the Philippine electronics industry realize its goals to become an integrated circuit hub in Asia by 2008 and generate $100 billion in total investment.
Actual amount of financing for the R&D facility will be discussed by ARCDI member-companies in the coming weeks. ARCDI is an P11-million collaboration of:
- Toshiba Information Equipment Inc.;
- Fujitsu Philippines Inc.;
- Intel Philippines;
- Philips Philippines;
- Integrated Microelectronics, Inc.;
- PSI Technologies;
- Matsushita Electric Philippines Corporation;
- Automated Technology Inc.;
- Texas Instruments Philippines Inc.;
- Pricon Microelectronics Inc.; and
- Cypress Manufacturing Ltd.
"In other countries like Taiwan, Hong Kong, and Singapore, companies spend as much as 70% of their budget for R&D. We do not have that here. So, what we want to do is help fund innovations," Mr. Quiazon said in an interview.
Electronics and semiconductors remain the country's top exporter, with shipment of electronic products amounting $1.962 billion as of February 2005, government data show.
These sectors, however, are expected to experience flat growth for 2005 and the next few years due to global economic slowdown and technological cycles.
Electronic exports in February were 9.8% lower than January's $2.176 billion and 0.9% lower than the $1.98 billion posted the year before.
Compounding the adverse effects of the global downturn is the issue of increasing competition from China, Vietnam and Thailand as preferred hubs for large-scale Japanese electronics and semiconductors multinationals.
The Japan Chamber of Commerce noted last year that monthly labor costs in the Philippines have become one of the highest in the region at $240, a stark contrast with China's $140 per head.
The Philippines also has an electricity rate of P5.6 per kilowatt-hour -- which is still rising, making it more expensive than China's P3 per kilowatt-hour.
Mr. Quiazon said that aside from providing an R&D facility, ARCDI member companies will also invest to improve its training center in order to yield some 4,000 certified engineers by end 2006.
These companies conducted the Competitive Landscape Study, which stated that the Philippines must be able to generate by 2008 some 200 engineers with doctorate degrees, 600 engineers with master's degrees, and 200,000 immediately employable engineers in order to stay competitive in Asia.
ARCDI's initiative to certify more engineers also forms part of a bid to put Philippines at par with its Asian competitors.
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