THE PHILIPPINES could attract more semiconductor investment as companies diversify manufacturing and sourcing operations across Asia-Pacific, according to a report released by FedEx.
The report, From AI to EVs: How APAC Semiconductors Drive the Global Innovation Map, developed with research firm Frost & Sullivan, examines how rising demand for artificial intelligence, high-performance computing, electric vehicles and advanced communications technologies is reshaping semiconductor production and regional supply chains.
It identifies the Philippines’ established semiconductor manufacturing base, skilled workforce and existing network of global manufacturers and local suppliers as potential advantages as the industry expands.
Asia-Pacific accounts for approximately 58 percent of global semiconductor industry revenue, according to the report. The region’s production network spans specialized hubs, 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 equipment, materials and specialty manufacturing inputs.
Southeast Asia, including the Philippines, has developed a significant role in semiconductor 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.
He said manufacturing capabilities would need to be supported by reliable connections to suppliers and customers across the region and globally to help the country capture more of the industry’s growth.
AI infrastructure drives demand
The report identifies artificial intelligence and high-performance computing as the fastest-growing drivers of semiconductor demand. It projects that more than 2,000 data centers will be built worldwide between 2026 and 2035.
The expansion is also increasing demand for supporting infrastructure, including high-density servers, networking equipment, cooling systems and power solutions. These components can move through several manufacturing, assembly and testing hubs before reaching data centers, adding complexity to international supply chains.
Electric vehicles, which require more chips than conventional vehicles, along with 5G, the Internet of Things, consumer electronics, medical devices and industrial automation, are also contributing to demand.
A FedEx survey conducted at Semicon Taiwan 2026 found that nearly four in five respondents expected Taiwan, Southeast Asia, Greater China and Japan to experience the greatest increases in semiconductor demand over the next three years.
The survey also indicated that companies were considering changes to their manufacturing and sourcing strategies. Thirty-five percent of respondents said their companies expected to expand manufacturing into additional Asia-Pacific markets over the next three years, while 25 percent planned to increase or diversify sourcing within the region or globally.
Supply chain resilience becomes a priority
Geopolitical uncertainty, regulatory complexity and cross-border trade requirements are adding pressure to semiconductor supply chains, the report said.
In the survey, 30 percent of respondents identified geopolitical disruption as the most significant challenge to future growth, ahead of rising operating costs and cross-border trade and customs complexity.
Companies are supplementing traditional just-in-time operations with strategies such as geographic diversification and inventory buffers, according to the report. These changes increase the need for international logistics networks that can handle high-value and time-sensitive shipments.
Forty-four percent of survey respondents identified faster international shipping as the most important capability when choosing 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.
He said companies were managing increasingly complex supply chains involving semiconductors, servers, networking equipment, cooling systems and other technology components across multiple markets.
Moving into higher value activities
The report said the Philippines could build on its existing semiconductor operations to attract investment in higher-value activities, including research, engineering, design and advanced manufacturing.
It also cited investment activity in Philippine economic zones as an indication of continued interest in electronics and advanced manufacturing. Small and medium-sized enterprises could benefit from opportunities in specialized, high-value segments of the semiconductor ecosystem.
FedEx operates a gateway at Clark, which the company said provides businesses in Central Luzon with access to its regional and global transportation network for international shipments.
The survey was commissioned by FedEx and conducted in person at Semicon Taiwan in Taipei from Sept. 2 to 4, 2026. It collected responses from 478 semiconductor industry participants representing corporations, industry associations and research institutes from Asia-Pacific, Europe and North America.
The report examines growth expectations, supply chain strategies, expansion challenges and logistics requirements across the Asia-Pacific semiconductor industry.
J.G Amor
