Electronics exports are still grappling with the lingering Ukraine-Russia war, as the lead time for the delivery of equipment from Europe to make electronic materials takes too long, the Semiconductor and Electronics Industries in the Philippines Foundation Inc. said.
SEIPI president Danilo Lachica said the lead time for delivery of semiconductor equipment, which takes two years at the onset of the Covid-19 pandemic, became one and a half years.
“The normal lead time is from 6 to 9 months in 2019, now it takes 1.5 years. While expediting the delivery of these raw materials costs ten times, from the traditional vessel to air freight, depending on the logistics mode that exporters use,” he said.
He said the ongoing war in Ukraine affects the semiconductor industry, as Russia supplies about 70 percent of palladium used for power semiconductor devices, while Ukraine delivers 40 to 50 percent of neon which is used for lasers and Andon lights worldwide.
Soaring fuel prices
“Aside from these, the Ukraine-Russia war made fuel prices soar, disrupting all supply chains. But the good thing is, still there is the demand for electronics. So, I guess the industry is starting to improve, but it’s not quite there yet,” he said.
As of September 2022, the cumulative electronics exports reached $35.34 billion, a 4.71 percent increase from last year’s figures.
This was 60.60 percent of the $58.31 billion total Philippine commodity exports, thus retaining the industry’s position as the country’s top commodity exporter.
Last year, total electronics exports grew by 12.9 percent in 2021 and reached an
all-time high of $45.92 billion. This export performance is even 6 percent higher than the pre-pandemic exports of $43.3 billion, thereby signaling a resurgence in the industry.
“I hope next year the environment has already changed. But this depends on how well the Ukraine-Russia conflict would turn out. Anyway, the electronics industry is very resilient. Even if prices are up, production will still be there. The Demand for medical electronics, telephones, as well as storage devices due to hyperscalers and automotive electronics, is now perking up,” Lachica said.
With this, Lachica urged the Marcos administration that it is about time for all seaports to be regulated by the government.
“In seaports, we don’t have control over international shipping lines as they will go wherever they want. The reason why the Port of Batangas and Subic are underutilized is that it will be costly for shipping lines if they are going to traverse there. We need to have a regulatory agency that works constructively with international shipping lines to come up with a compromise that we will not be held hostage in terms of reducing the cost of shipping,” Lachica expressed.