EMS planning $800-M Batangas plant making consumer products for EU

EMS.COM.PH

CONTRACT manufacturer EMS Group said it is expecting investors to put up $800 million for a plant in Batangas that will manufacture electronic products for the European consumer market.

“This is already 95% sure, and it will happen in the second half,” EMS Group Chairman and Chief Executive Officer Ferdinand A. Ferrer told reporters on the sidelines of a plant tour on Friday.

Once operational, the plant will support 5,000 to 6,000 direct jobs.

“Bringing that company to the Philippines will open up other opportunities for other products that we can also manufacture here,” Mr. Ferrer said.

“Because of the technology that they will bring here, we will now be able to go to our other wishlist customers that we could have brought here four years ago,” he added.

The site selected in an economic zone in Batangas.

Mr. Ferrer did not disclose further details about the investor other than to say it has operations in another ASEAN country.

“This will complete their ecosystem here… Eventually, the majority of their operations will be here, and of course they will still have a European counterpart,” he added.

EMS is also expecting the entry of multinationals from Japan and the US which will be pulling out their operations from China.“We are looking at a total package of investment of around $800 million. It’s for semiconductors. Part of that $800 million is already here, quietly. It’s already running, and the full-rate production will happen probably in 2026, as they are still testing the waters in the Philippines,” said Mr. Ferrer.

The two investments are expected to operate in a Philippine Economic Zone Authority-operated economic zone in Batangas and to generate up to 3,000 jobs.

Meanwhile, Mr. Ferrer said that the government and the private sector are working on a lab-scale wafer fabrication hub that will help train more engineers in wafer fabrication.

“Once we have a lab-scale wafer fab on the 6-inch and 8-inch wafer levels, maybe we can attract other designers to have (their products) designed here, and hopefully that will help grow our wafer fab industry,” he added.

Expected to cost P500 million, he said that the funding for the lab-scale hub will be sourced from official development assistance or through support from the US CHIPS and Science Act.

He said that full-size wafer fab plants usually cost $20–50 billion.

“This is a private sector-led project together with the government. Hopefully the government can help encourage other governments to support the lab-scale wafer fab,” he said.

“The good news is that our administration is on the radar of a lot of governments now,” he added.

He said that the lab-scale wafer fab will demonstrate the Philippines’ potential in wafer fabs to eventually attract more investments.

Asked about logistics issues, he said that the industry is still facing a 15-20% increase in logistics costs since the pandemic amid conflict in the Red Sea and the war in Ukraine. — Justine Irish D. Tabile