The United States will be soon programming specific funding allocations for the “Creating Helpful Incentives to Produce Semiconductors” or CHIPS Act for the Philippines with the ongoing study of the Organization for Economic Cooperation and Development (OECD), visiting US Department of State Assistant Secretary Ramin Toloui said.

Toloui is on a two-day visit in Manila, his fourth stop in his official trip to Asia, to deepen US economic ties with Japan, the Philippines, Singapore, South Korea, and Vietnam.

In an interview here Tuesday, Toloui said the OECD study will help the US to program specific allocations to target priority areas under the CHIPS Act.

To recall, the Philippines is one of the countries chosen by the US as partners under the CHIPS and Science Act, wherein the US government earmarked USD500 million for the International Technology, Security, and Innovation (ITSI) Fund to be spent over the next five years in the partner countries.

The CHIPS Act aims to diversify US’ semiconductor supply chain, by strengthening the sector in the partner countries to make it conducive for US companies to invest in these nations.

“Before the study is made public, we will be able to use the results of the interim report to actually make some funding decisions, and those should be available in the next couple of months,” Toloui told reporters.

“The purpose of the fund is to try to target select set of priority areas that are important to catalyzing larger volumes of private sector investment in this sector,” he said.

The US official said that for the ITSI Fund, the current priority activities for the semiconductor industry are assembly, testing, and packaging.

“The Philippines has been a significant player in the assembly, testing, and packaging component in downstream manufacturing component of the semiconductor supply chain, with semiconductors demand poised to continue to grow,” Toloui added.

He said there has been a lot of interest in terms of wafer fabrication lab, “but the time has to be right for it”.

The Philippines has been keen in attracting investments in wafer fabrication plants that will enable the local industry to prototype integrated circuit (IC) designs.

However, wafer fabrication labs consume large load of electricity.

A study by McKinsey & Company found that a large semiconductor fabrication lab consumes as much as 100 megawatt hours per hour and can account up to 30 percent of fabrication operating costs.

Operating a wafer fabrication lab in a country with high electricity rates and has power supply issues would be challenging to lure these kind of investments.

Moreover, Toloui shared that the US government has partnered with the Arizona State University as implementing partner on some of the CHIPS Act funding for workforce development. (PNA)