TECH NEWS | AI boom opens growth opportunities for Philippine chip industry
Southeast Asia, including the Philippines, plays a significant role in assembly, packaging and testing.
The Philippines could attract more semiconductor investment as demand for artificial intelligence, high-performance computing and electric vehicles reshapes supply chains across Asia Pacific, according to a report released by FedEx.
The report, From AI to EVs: How APAC Semiconductors Drive the Global Innovation Map, was developed with research firm Frost & Sullivan. It identifies the Philippines’ established semiconductor manufacturing base, skilled workforce and existing network of global manufacturers and local suppliers as potential advantages as companies diversify production and sourcing across the region.
The country is an established hub for semiconductor assembly, packaging and testing. The report said the industry could move into higher-value activities, including research, engineering, design and advanced manufacturing, as companies seek to expand their manufacturing footprints.
Asia Pacific accounts for approximately 58% of global semiconductor industry revenue, according to the report. Its production network spans specialized markets, with China supplying materials and serving as a major consumer market, Taiwan leading advanced semiconductor manufacturing, South Korea specializing in memory chips and advanced fabrication, and Japan supplying semiconductor equipment and materials.
Southeast Asia, including the Philippines, plays a significant role in assembly, packaging and testing.
“The Philippines has decades of experience and a strong talent base in semiconductor manufacturing. The opportunity now is to build on these strengths as the industry enters a new phase driven by AI, advanced computing and increasingly distributed supply chains,” said Garrick Thompson, managing director of FedEx Philippines.
“For the Philippines to capture more of this growth, manufacturing capability needs to be matched by reliable connectivity to suppliers and customers across the region and around the world. This is where logistics can help turn our geographic position and industrial capabilities into a stronger competitive advantage,” he said.
AI infrastructure drives chip demand
The report identifies AI and high-performance computing as the fastest-growing drivers of semiconductor demand. More than 2,000 data centers are expected to be built worldwide between 2026 and 2035.
Beyond chips, AI infrastructure requires high-density servers, networking equipment, cooling systems and power solutions. These components often move through multiple manufacturing, assembly and testing locations before reaching data centers, creating complex international supply chains.
Demand is also growing from electric vehicles, which require more chips than conventional vehicles, as well as 5G networks, the Internet of Things, consumer electronics, medical devices and industrial automation.
The report said efficient movement of semiconductors and related technologies across markets has become increasingly important as production and deployment span multiple countries.
A FedEx survey conducted at SEMICON Taiwan 2026 found that nearly four in five respondents expected Taiwan, Southeast Asia, Greater China and Japan to see the greatest increases in semiconductor demand over the next three years.
The survey also indicated that companies are considering changes to their regional manufacturing and sourcing strategies. Thirty-five percent of respondents expected their companies to expand manufacturing into additional Asia Pacific markets over the next three years, while 25% planned to increase or diversify sourcing within the region or globally.
Supply chain resilience gains importance
Geopolitical uncertainty, regulatory complexity and rising operating costs are pushing semiconductor companies to reconsider supply chain strategies that prioritize efficiency above other concerns.
In the FedEx survey, 30% of respondents identified geopolitical disruption as the most significant challenge to growth, ahead of rising operating costs and cross-border trade and customs complexity.
The report said companies were supplementing traditional just-in-time operations with measures such as geographic diversification and inventory buffers to reduce exposure to disruptions.
These changes are increasing demand for logistics networks that can handle high-value, time-sensitive shipments while providing shipment visibility and reliable cross-border connections.
Forty-four percent of survey respondents identified faster international shipping as the most important capability when selecting logistics and supply chain partners over the next three years.
“The next decade of innovation will be shaped not only by advances in semiconductors, but by the strength and resilience of the supply chains that power AI and digital infrastructure,” said Salil Chari, president of FedEx Asia Pacific.
“As investment in AI infrastructure accelerates, businesses are managing increasingly complex supply chains spanning semiconductors, servers, networking equipment, cooling systems and advanced technology components across multiple markets,” Chari said.
He added that resilience, visibility and agility had become strategic advantages as businesses connected suppliers and production sites across multiple markets.
Opportunities for PH manufacturers
The report said Philippine economic zones continue to attract electronics and advanced manufacturing projects. Government efforts are also focused on moving the country toward higher-value activities within the semiconductor supply chain.
The country’s existing manufacturing base could help it benefit as semiconductor companies diversify production and sourcing across Asia Pacific. However, capturing more of that investment will require manufacturing capabilities to be supported by reliable logistics and international connectivity, the report said.
Small and medium-sized enterprises could also benefit from opportunities in specialized, high-value segments of the semiconductor ecosystem.
FedEx cited its Philippine operations, including its gateway at Clark, as part of the logistics infrastructure connecting local businesses to regional and global markets. Clark’s proximity to industrial and economic zones in Central Luzon provides access to international shipping networks, according to the company.
The report drew on an onsite survey conducted during SEMICON Taiwan in Taipei from Sept. 2-4, 2026. It collected responses from 478 semiconductor industry participants representing corporations, industry associations and research institutes in Asia Pacific, Europe and North America.
The survey examined growth expectations, supply chain strategies, expansion challenges and future logistics requirements across the Asia Pacific semiconductor ecosystem.
Full disclosure: All news articles published on the TechSabado website are written by human journalists, unless otherwise specified. Final text editing is also performed by human editors, with artificial intelligence (AI) used only to assist with additional grammar and style guide corrections..
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