A Possible Taiwan/Philippines Partnership with Pax Silica
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| Taiwan Today |
The issue with Pax Silica shouldn't be viewed as black and white. Instead, I thought about how Pax Silica's yes-or-no should undergo thorough examination. In fact, the Philippines can set mutual conditions, like every other country, regarding the Pax Silica agreement. It would be a mutual benefit between countries within the Pax Silica. Now, it's time to look at the possibility of Taiwan joining the Philippines Pax Silica.
Let's analyze the possible Taiwan/Philippines partnership with Pax Silica
An article by Tech Pilipinas, written by Luis Reginaldo Medilo, reveals details that could help the Philippines more than just arbitration:
Taiwan is looking to the Philippines’ planned Pax Silica industrial hub in New Clark City, Tarlac, as a potential venue for cooperation in semiconductors and artificial intelligence, Taiwan Foreign Minister Lin Chia-lung said this week, as Taipei seeks a role in emerging trusted supply chains across the Indo-Pacific.
The Philippines formally joined Pax Silica, a United States-led initiative, in April. The government is positioning a roughly 4,000-acre site in New Clark City as a hub for artificial intelligence, semiconductors, and advanced manufacturing, forming part of the broader U.S.-Japan-Philippines Luzon Economic Corridor. Taiwan currently employs about 170,000 Filipino migrant workers, and has set up a government-run recruitment center in Manila to help Taiwanese employers hire directly from the Philippines, according to Lin.
Speaking to visiting Indo-Pacific journalists in Taipei, Lin said Taiwan and the Philippines could pursue an industrial corridor covering semiconductors, artificial intelligence, drones, shipbuilding, and undersea cables. No specific Taiwanese investment or agreement involving Pax Silica has been announced.
Taiwan is not a signatory to Pax Silica but joined the Pax Silica Summit in Washington in June at the invitation of the U.S. State Department, given its position in the global semiconductor and AI supply chain.
Lin said Taiwan and the Philippines could move from economic integration toward deeper security coordination, and called for closer alignment among Taiwan, the United States, Japan, and the Philippines in defining their roles amid regional security concerns. “We must think strategically about how investment, technology, talent exchanges and industrial ties can help us become more trusted and indispensable to one another,” he said.
Here are extra details from an article written by Jason Mago from the Daily Tribune. As always, I will only take an excerpt. It's because I want people to cite my sources as their sources and not my blog as the source. Now, time to look at these details even more:
Taiwan’s interest
Taiwan’s interest comes as the Philippines develops a roughly 4,000-acre, or 1,620-hectare, industrial hub in New Clark City under Pax Silica, aimed at attracting semiconductor, advanced-manufacturing and other strategic industries. The Philippines formally joined the US-led initiative in April.
Taiwan is a major force in the global semiconductor industry, giving its potential participation significance for Manila’s effort to move beyond traditional electronics assembly and capture more value from the global technology supply chain.
No specific Taiwanese investment or agreement involving the New Clark City project was announced. Lin’s remarks instead point to a potential avenue for Taiwan to contribute technology, manufacturing expertise and supply-chain connections to the Philippine hub.
Significant potential role
Taiwan’s potential role is significant because of its position in the global chip industry.
The island is home to companies spanning semiconductor design, manufacturing, packaging and other parts of the technology ecosystem. Its expertise could complement the Philippines’ existing electronics and semiconductor industry as Manila seeks to attract higher-value manufacturing.
Lin said Taiwan could contribute capabilities in semiconductors, AI, information and communications technology and advanced manufacturing while working with Southeast Asian economies on industrial development.
“We must think strategically about how investment, technology, talent exchanges and industrial ties can help us become more trusted and indispensable to one another,” Lin said.
The proposal comes as governments increasingly treat semiconductor and AI supply chains as strategic assets amid competition over advanced technologies.
New Clark City ambitions
The proposed Pax Silica site covers about 4,000 acres, or roughly 1,620 hectares, in New Clark City, Tarlac.
The Bases Conversion and Development Authority (BCDA) has positioned the project as an industrial and technology ecosystem centered on semiconductors, advanced manufacturing and AI-related industries.
BCDA recently clarified that the development is expected to focus predominantly on semiconductor and industrial activities rather than a massive hyperscale data center.
The first phase is expected to cover about 500 hectares, with site development potentially beginning within three to five years, according to BCDA.
The project, however, has drawn scrutiny over its potential demands on electricity, water and land.
Recent estimates put potential electricity requirements at about 3 gigawatts and water demand at roughly 130 million liters a day, prompting questions about the project’s impact on Central Luzon’s resources.
BCDA and other government officials have defended the project, saying infrastructure and resource requirements are being studied and that the development will comply with Philippine environmental and community safeguards.
What Taiwan could bring
For Manila, Taiwan’s interest could provide an opportunity to attract technology, capital and expertise from one of the world’s most important semiconductor centers.
The Philippines already has an established electronics and semiconductor sector, but much of the industry remains concentrated in assembly, testing and packaging.
Deeper links with Taiwan could potentially help expand capabilities into higher-value activities.
For Taiwan, meanwhile, cooperation with the Philippines could provide another production and supply-chain link in Southeast Asia as companies diversify operations and governments seek more resilient sources for critical technologies.
The proposed cooperation remains at the exploratory stage, with no specific Taiwanese investment in New Clark City announced.
But Lin’s proposal puts Taiwan among the potential technology partners Manila could tap as it develops Pax Silica into a Philippine hub for semiconductors, AI and advanced manufacturing.
My own personal takes
- The Philippines needs to invite more FDI related to public services. This includes letting electricity providers own 100% of their shares. The reality with high electricity rates is based ons supply and demand.
- Environmental rules concerning water usage and mining. The Philippines would need to invite more that invest in environmental technology. Singapore accepted FDIs while investing in a greener, cleaner Singapore. The Philippines can follow and modify that model over time.
- The benefit must be between the two countries. Taiwan takes the profits based on net income after taxes. Meanwhile, the Philippines gets to enjoy the growth, like the monthly 12% VAT, and the income taxes (which include the annual income tax), and creates a wider network of customers and service providers for Filipino businesses.
