US Chip Supply ‘Too Concentrated’ in Few Nations, Raimondo Says

(Bloomberg) -- The US wants to help the Philippines double its semiconductor facilities, to lessen the geographic concentration of the global chip supply chain, Commerce Secretary Gina Raimondo said in a business forum in Manila on Tuesday.

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The comments came in the wake of announcing over $1 billion in investments from US companies in the Philippines as part of a trade mission organized by President Joe Biden and led by Raimondo. The commerce chief, much like US Secretary of State Antony Blinken, has sought to encourage nations in Southeast Asia to deepen their investment in chipmaking and related industries, at a time when much of that business still happens in Taiwan and South Korea.

“US companies have realized that our chip supply chain is way too concentrated in just a few countries in the world,” Raimondo said. “Forget about geopolitics, just at that level of concentration, you know the old adage don’t put all your eggs in one basket. Why do we allow ourselves to be buying so many of our chips from one or two countries? That’s why we need to diversify.”

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The Philippines has 13 semiconductor assembly, testing and packaging facilities and Raimondo said “let’s double it.”

She did not offer any specifics on how the US may assist in that, other than to say it would be an attractive destination for US corporate customers. The Southeast Asian nation is rich on critical minerals, she added, and businesses are looking internationally to make their supply chain more resilient.

“I believe you are on top of the list,” Raimondo told Philippine executives.

--With assistance from Andreo Calonzo.

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