Moody's: Philippines among Southeast Asia’s rising semiconductor hubs

‘Philippines among Southeast Asia’s rising semiconductor hubs’

Keisha Ta-Asan
Philstar Global
03 September 2025

MANILA, Philippines — The Philippines is emerging as one of Southeast Asia’s growing hubs for semiconductor assembly and testing, with the industry now accounting for about 32 percent of the country’s total goods exports in 2024, according to Moody’s Ratings.

In its latest sector review, Moody’s said the Philippines, alongside Malaysia and Vietnam, is playing a bigger role in the global chip supply chain as multinational firms diversify operations amid United States-China trade tensions and calls to strengthen supply chain resilience.

While Southeast Asia is gaining ground in back-end processing – particularly assembly, testing and packaging – Moody’s cautioned that economies like the Philippines face hurdles in moving up the value chain.

“Technical gaps constrain their ability to capture greater economic value,” the report said, pointing to weaknesses in research and development, talent and infrastructure.

According to Moody’s, Asia continues to dominate global semiconductor manufacturing, commanding more than 75 percent of overall chipmaking capacity, spanning advanced wafer fabrication, materials and assembly.

Despite US-led efforts to reshore production and the intensifying push for self-sufficiency in China, large-scale relocations of chipmaking out of Asia remain “commercially challenging” due to cost advantages and established ecosystems.

In the Philippines, semiconductors remain the backbone of electronics exports, supplying components used in consumer devices, automotive and industrial applications.

However, Moody’s warned that chronic issues such as power supply reliability, logistics bottleneck and limited investment could weigh on the country’s ability to attract higher-value operations in fabrication and design.

Still, the credit watcher said the region is on track to capture around 24 percent of global semiconductor back-end capacity by 2032, up from current levels. Malaysia leads the pack, but the Philippines and Vietnam are expected to expand their roles as cost-competitive alternatives for multinational players.

“Securing a competitive edge will hinge on workforce development, innovation and stronger public-private partnerships,” Moody’s said, adding that without such reforms, Southeast Asian economies risk remaining concentrated in low-margin, labor-intensive segments of the semiconductor chain.