Electronics
OVERVIEW
The electronics industry accounts for 69% of the total Philippine exports.
In 2001 alone, the industry clocked a total of US$24 billion in export revenues. On the average, total electronic exports increased annually by 21% from 1996 to 2000.
In 2001, exports slowed down due to inventory build-up and weak semiconductor and electronics demand. The year 2002, however, saw a strong recovery with more than 9% growth over the 2001 level of US$21.62 billion.
Note that electronic companies in Cebu are multinational investors. They manufacture electronic components, not whole appliances, for exports.
Electronics account for 51.12 percent of the total exports of Cebu.
PHILIPPINE ELECTRONICS COVERAGE
The Philippine electronics industry covers the following sub-sectors:
Semiconductors (microelectronics) and other components
Biggest subsector of the industry
Consists of manufacturers of integrated ciruits (ICs), transistors, diodes, resistors, capacitors, coils, transformers, PCBs and other components.
Major players include the Philippine subsidiaries of Intel, Texas Instruments, Philips, Amkor, Fairchild Semiconductors, etc.
Electronic Data Processing (EDP) Equipment
Consists of manufacturers of computers, peripheral storage and input/output devices.
Products include laptops, desktop PCs, printers, computer monitors, drives: hard disk, optical, ZIP, CD-ROM.
Major players include Toshiba, Acer, Epson, Fujitsu, Ionics, Sampo Technology.
Office Equipment
Includes manufacturers of photocopiers, fax machines, and electronic calculators.
Companies: Matsushita Business Machines, Sharp and Seiyo Electronics
Telecommunication Equipment
Products: telephone sets, modems, copper communication cables, and fiber optic cables. Players include ETSI Technologies, Eupen Cable; and NEC Technologies
.
Communications and Radar
Products: cellular phones, pagers, closed circuit television (CCTV), CB transceivers, radar detectors, marine and land mobile radios
Leading players include Matsushita Communication, Uniden, Casio and Euro CB.
Control and Instrumentation
Refers to test and measuring instruments such as oscilloscopes, signal generators, ammeters, voltmeters, ohmmeters, cross talk meters, etc.
Philippine-based companies includes manufacturers of PCB assemblies for instrumentation / testing equipment, digital thermometers, microscope of PCB assemblies for instrumentation / testing equipment, digital thermometers, microscope, automotive test equipment and multitesters.
Players include Precision Microcircuits, Sara Digital Network, Phil Makoto Corp., and Insung Phils. Electronics.
Medical and Industrial
Covers equipment used for X-ray and other medical applications, railway signaling, security and fire alarms.
Philippine-based companies are involved in the production of spiro analyzers and smoke detectors.
One of the leading players is P. Imes Corporation.
Automotive Electronics
Comprised mainly of manufacturers of car stereos, anti-skid brake systems (ABS), and car body electronics (CBE)
Major players include Temic Automotive, Fujitsu Ten, Muramoto Audio-Visuals Phils., and Clarion Mfg.
Consumers Electronics
Products: TV sets, VCD players, electronic games, radio cassette players and karaoke machines.
Major players include Matsushita Electric (Panasonic), Sony, Sharp, LG-Collins and JVC.
Exports (2001)Total Electronics
US$ 24 billion
69% of total Philippine exports
Top export markets:
United States, Japan, Netherlands, Singapore and Taiwan
Characteristics of the industry :
Dominated by multinational firms 715 electronic firms 72% of which are foreign owned and 28% are locally owned
Export-oriented
Engaged in assembly and test manufacturing activities
High quality and productivity
Growing base of components supplier
Characteristics of a typical electronics company
ISO-certified
Practices the best known methods in manufacturing (JIT, TQM, 5S, QPIC)
Capabilities range from IC packaging, PCB assembly, full product assembly
Has in-house training capability
Runs at three shifts a day
Provides better compensation package compared to other industries
Non-unionized with low turnover
Operates with clean rooms and fully integrated manufacturing facilities
Employment
335,000 workers as of 2002
Manpower
Available labor force of 32 million
Over 100,000 engineering, IT and technical graduates every year
Trainable and technically capable: Needs only 6-8 weeks to learn technical skillsFamiliarity with quality programs
Cost competitiveness in terms of compensationProduction manager US$1,000-1,500 / monthProduction supervisor US$ 450 -700 / month Production operator US$ 6-7 / day
Flexible: multi-skilled and English-speaking
Global Market Trends
Semiconductors & other components
According to the Semiconductor Industry Association, the leading voice of the semiconductor industry in the United States, global chip sales are expected to rise by 6.3% as Asian chip sales are forecasted to increase by 45% upon the opening of new markets in China
The world market for semiconductors will grow from US$ 141 billion in 2001 to US$ 218 billion in 2004.
According to Morgan Stanley, the IC market in China will grow by nearly 30% a year during the next four to five years, driven by demand for PCs and mobile communications. However, they estimate that domestic production would only be able to meet 15% of that demand.
Semiconductor revenue forecast:
PCs
The worldwide market for PCs is expected to turn positive in Q3. Increased business capital spending for leading-edge computers and networking equipment is going to lead to a semiconductor upturn in mid-2002 with an expected 12% increase in 2003. (Dataquest)
From 130 million PCs in 2000 to 213 million PCs in 2005
Digital Consumer Electronics
Consumer electronics is a potential growth market this year as digital applications continue to drive the consumer market with analog-to-digital conversion, 2.5G cell phones, digital cameras and digital TV with an expected 15% growth in 2003. (Dataquest)
End Equipment Sales and Forecasts
Mobile Phones
Sales in cellular units are expected to increase by 18% in 2003 as positive / recovery signs from the cell phone market are foreseen during Q2 of 2002. (Dataquest)
The handset market is projected to grow from 400 million handsets in 2000 to one billion handsets by 2004
Demand for mobile phone handsets is recovering so fast that manufacturers are being hit by a temporary shortage of some parts. Demand is being led by Asia, particularly the largely untapped Chinese market, but there is growth too in both Europe and United States.
Servers
Sales of Itanium-based servers will reach 26,000 units in 2001 and is expected to increase to 540,000 units over the next three years.
Smart Handheld Devices
The worldwide smart handheld market will increase from US$ 8.2 billion in 2000 to US$ 26.6 billion in 2004.
Optical Networking Equipment
The market for optical networking equipment is projected to grow from US$ 31 billion in 2000 to US$ 93 billion by 2003.
Cable Modems and Digital Subscriber Line (DSL)
The market for semiconductors for cable and DSL is expected to grow from US$ 2 billion to more than US$ 3.8 billion in 2003.
PROSPECTS
The demand for electronics would continue to grow in the next few years.
The total global telecommunications market is valued at 1.8 trillion dollars. Of this amount, 412 billion dollars represent electronics equipment.
The United States telecommunications market is estimated at 663 billion dollars and is expected to grow seven percent while the western European market valued at 372 billion dollars would grow at six percent per annum.
On the other hand, the Asia-Pacific telecommunications market is estimated to grow at 18 percent from its present 406 billion dollars. The information technology spending on equipment is also estimated to grow at 2.3 percent.
Meanwhile, US households continue to buy electronic products such as televisions, home radios, cellular phones, personal computer, camcorders, digital video disc players and others. Television and home radios remain the most popular electronic products with 98 percent of US households having these products.
In addition, the world Internet device market is expected to grow. The market for personal computers is expected to grow from only 324 million units in 2001 to 817 million units in 2005. The Internet access device market would also expand from 46 million units in 2001 to 466 million units in 2005 while the telephone market would grow from only 64 million units in 2001 to 707 million units in 2005. As a result, the total market value for these devices would also increase from 567 million dollars to 1.021 billion dollars for PCs; 19 million dollars to 128 million dollars for Internet access devices; and from 10 million dollars to 60 million dollars for telephones.
US businesses also increased its spending for IT products from only 31 percent of total investment to 51 percent. The compound annual growth rate of US IT spending is expected to go up to 549 billion dollars in 2006 compared with 395 billion dollars in 2002. IT spending include services, packaged software and equipment, according to Field.
On the other hand, worldwide interactive digital TV viewers are expected to reach 625.5 million viewers by year 2005. The worldwide wireless Internet population would reach 858 million by 2007.
Cebu Mitsumi Inc. and several companies located at Mactan Export Processing Zone (MEPZ) such as Fairchild Semiconductor, Lear Automotive Phils., Celestica, and Asahi Optical are exporting electronics components to US and other countries.
Top Cebu-based Electronics Exporters for year 2005
1. Cebu Mitsumi Incorporated
2. Taiyo Yuden Phils.
3. Teradyne Philippines LTD.
4. Fairchild Semi-conductor Corp..
5. Muramoto Audio Visual Phils.
6. Lear Automotive (EEDS) Phil. Inc.
7. Autoliv Izumi
8. Celestica Philippines
(source: BOI)
The electronics industry accounts for 69% of the total Philippine exports.
In 2001 alone, the industry clocked a total of US$24 billion in export revenues. On the average, total electronic exports increased annually by 21% from 1996 to 2000.
In 2001, exports slowed down due to inventory build-up and weak semiconductor and electronics demand. The year 2002, however, saw a strong recovery with more than 9% growth over the 2001 level of US$21.62 billion.
Note that electronic companies in Cebu are multinational investors. They manufacture electronic components, not whole appliances, for exports.
Electronics account for 51.12 percent of the total exports of Cebu.
PHILIPPINE ELECTRONICS COVERAGE
The Philippine electronics industry covers the following sub-sectors:
Semiconductors (microelectronics) and other components
Biggest subsector of the industry
Consists of manufacturers of integrated ciruits (ICs), transistors, diodes, resistors, capacitors, coils, transformers, PCBs and other components.
Major players include the Philippine subsidiaries of Intel, Texas Instruments, Philips, Amkor, Fairchild Semiconductors, etc.
Electronic Data Processing (EDP) Equipment
Consists of manufacturers of computers, peripheral storage and input/output devices.
Products include laptops, desktop PCs, printers, computer monitors, drives: hard disk, optical, ZIP, CD-ROM.
Major players include Toshiba, Acer, Epson, Fujitsu, Ionics, Sampo Technology.
Office Equipment
Includes manufacturers of photocopiers, fax machines, and electronic calculators.
Companies: Matsushita Business Machines, Sharp and Seiyo Electronics
Telecommunication Equipment
Products: telephone sets, modems, copper communication cables, and fiber optic cables. Players include ETSI Technologies, Eupen Cable; and NEC Technologies
.
Communications and Radar
Products: cellular phones, pagers, closed circuit television (CCTV), CB transceivers, radar detectors, marine and land mobile radios
Leading players include Matsushita Communication, Uniden, Casio and Euro CB.
Control and Instrumentation
Refers to test and measuring instruments such as oscilloscopes, signal generators, ammeters, voltmeters, ohmmeters, cross talk meters, etc.
Philippine-based companies includes manufacturers of PCB assemblies for instrumentation / testing equipment, digital thermometers, microscope of PCB assemblies for instrumentation / testing equipment, digital thermometers, microscope, automotive test equipment and multitesters.
Players include Precision Microcircuits, Sara Digital Network, Phil Makoto Corp., and Insung Phils. Electronics.
Medical and Industrial
Covers equipment used for X-ray and other medical applications, railway signaling, security and fire alarms.
Philippine-based companies are involved in the production of spiro analyzers and smoke detectors.
One of the leading players is P. Imes Corporation.
Automotive Electronics
Comprised mainly of manufacturers of car stereos, anti-skid brake systems (ABS), and car body electronics (CBE)
Major players include Temic Automotive, Fujitsu Ten, Muramoto Audio-Visuals Phils., and Clarion Mfg.
Consumers Electronics
Products: TV sets, VCD players, electronic games, radio cassette players and karaoke machines.
Major players include Matsushita Electric (Panasonic), Sony, Sharp, LG-Collins and JVC.
Exports (2001)Total Electronics
US$ 24 billion
69% of total Philippine exports
Top export markets:
United States, Japan, Netherlands, Singapore and Taiwan
Characteristics of the industry :
Dominated by multinational firms 715 electronic firms 72% of which are foreign owned and 28% are locally owned
Export-oriented
Engaged in assembly and test manufacturing activities
High quality and productivity
Growing base of components supplier
Characteristics of a typical electronics company
ISO-certified
Practices the best known methods in manufacturing (JIT, TQM, 5S, QPIC)
Capabilities range from IC packaging, PCB assembly, full product assembly
Has in-house training capability
Runs at three shifts a day
Provides better compensation package compared to other industries
Non-unionized with low turnover
Operates with clean rooms and fully integrated manufacturing facilities
Employment
335,000 workers as of 2002
Manpower
Available labor force of 32 million
Over 100,000 engineering, IT and technical graduates every year
Trainable and technically capable: Needs only 6-8 weeks to learn technical skillsFamiliarity with quality programs
Cost competitiveness in terms of compensationProduction manager US$1,000-1,500 / monthProduction supervisor US$ 450 -700 / month Production operator US$ 6-7 / day
Flexible: multi-skilled and English-speaking
Global Market Trends
Semiconductors & other components
According to the Semiconductor Industry Association, the leading voice of the semiconductor industry in the United States, global chip sales are expected to rise by 6.3% as Asian chip sales are forecasted to increase by 45% upon the opening of new markets in China
The world market for semiconductors will grow from US$ 141 billion in 2001 to US$ 218 billion in 2004.
According to Morgan Stanley, the IC market in China will grow by nearly 30% a year during the next four to five years, driven by demand for PCs and mobile communications. However, they estimate that domestic production would only be able to meet 15% of that demand.
Semiconductor revenue forecast:
PCs
The worldwide market for PCs is expected to turn positive in Q3. Increased business capital spending for leading-edge computers and networking equipment is going to lead to a semiconductor upturn in mid-2002 with an expected 12% increase in 2003. (Dataquest)
From 130 million PCs in 2000 to 213 million PCs in 2005
Digital Consumer Electronics
Consumer electronics is a potential growth market this year as digital applications continue to drive the consumer market with analog-to-digital conversion, 2.5G cell phones, digital cameras and digital TV with an expected 15% growth in 2003. (Dataquest)
End Equipment Sales and Forecasts
Mobile Phones
Sales in cellular units are expected to increase by 18% in 2003 as positive / recovery signs from the cell phone market are foreseen during Q2 of 2002. (Dataquest)
The handset market is projected to grow from 400 million handsets in 2000 to one billion handsets by 2004
Demand for mobile phone handsets is recovering so fast that manufacturers are being hit by a temporary shortage of some parts. Demand is being led by Asia, particularly the largely untapped Chinese market, but there is growth too in both Europe and United States.
Servers
Sales of Itanium-based servers will reach 26,000 units in 2001 and is expected to increase to 540,000 units over the next three years.
Smart Handheld Devices
The worldwide smart handheld market will increase from US$ 8.2 billion in 2000 to US$ 26.6 billion in 2004.
Optical Networking Equipment
The market for optical networking equipment is projected to grow from US$ 31 billion in 2000 to US$ 93 billion by 2003.
Cable Modems and Digital Subscriber Line (DSL)
The market for semiconductors for cable and DSL is expected to grow from US$ 2 billion to more than US$ 3.8 billion in 2003.
PROSPECTS
The demand for electronics would continue to grow in the next few years.
The total global telecommunications market is valued at 1.8 trillion dollars. Of this amount, 412 billion dollars represent electronics equipment.
The United States telecommunications market is estimated at 663 billion dollars and is expected to grow seven percent while the western European market valued at 372 billion dollars would grow at six percent per annum.
On the other hand, the Asia-Pacific telecommunications market is estimated to grow at 18 percent from its present 406 billion dollars. The information technology spending on equipment is also estimated to grow at 2.3 percent.
Meanwhile, US households continue to buy electronic products such as televisions, home radios, cellular phones, personal computer, camcorders, digital video disc players and others. Television and home radios remain the most popular electronic products with 98 percent of US households having these products.
In addition, the world Internet device market is expected to grow. The market for personal computers is expected to grow from only 324 million units in 2001 to 817 million units in 2005. The Internet access device market would also expand from 46 million units in 2001 to 466 million units in 2005 while the telephone market would grow from only 64 million units in 2001 to 707 million units in 2005. As a result, the total market value for these devices would also increase from 567 million dollars to 1.021 billion dollars for PCs; 19 million dollars to 128 million dollars for Internet access devices; and from 10 million dollars to 60 million dollars for telephones.
US businesses also increased its spending for IT products from only 31 percent of total investment to 51 percent. The compound annual growth rate of US IT spending is expected to go up to 549 billion dollars in 2006 compared with 395 billion dollars in 2002. IT spending include services, packaged software and equipment, according to Field.
On the other hand, worldwide interactive digital TV viewers are expected to reach 625.5 million viewers by year 2005. The worldwide wireless Internet population would reach 858 million by 2007.
Cebu Mitsumi Inc. and several companies located at Mactan Export Processing Zone (MEPZ) such as Fairchild Semiconductor, Lear Automotive Phils., Celestica, and Asahi Optical are exporting electronics components to US and other countries.
Top Cebu-based Electronics Exporters for year 2005
1. Cebu Mitsumi Incorporated
2. Taiyo Yuden Phils.
3. Teradyne Philippines LTD.
4. Fairchild Semi-conductor Corp..
5. Muramoto Audio Visual Phils.
6. Lear Automotive (EEDS) Phil. Inc.
7. Autoliv Izumi
8. Celestica Philippines
(source: BOI)
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