03 July 2008

Taiwan Firms Keen on Subic IT Parks

Two leading Taiwanese electronic manufacturing firms will spearhead the establishment here of information technology (IT) parks to jumpstart Subic’s high-technology ventures in connection with rent-free incentives approved during the Philippines-Taiwan joint economic conference last month.

Subic Bay Metropolitan Authority (SBMA) Administrator Armand Arreza said that Gongin Precision Industrial Co. Ltd., and the TECO Group of Companies have both expressed interest to build IT parks patterned after Taiwan’s progressive Nankang Software Park (NSP).

“We want Subic to move upstream into the electronic industry,” Arreza said. “Instead of the usual testing and packaging, Subic will now provide software design and manufacture complete electronic products.”

The NSP, which focuses mainly on software development, integrated circuit (IC) design and biotechnology, “would serve as a good model for Subic’s push to high value-added industries,” Arreza added.

According to initial talks with the SBMA, Gongin will set up a cluster of factories in a 10-hectare lot to produce precision tools and electronic products.

It will also introduce in this free port a one-stop-shop customer support concept for companies such as General Electric, Seneca, Applied Materials, Philips, Hitachi, Mitsubishi and TDK.

Gongin, which is a major player in Taiwan’s machinery and equipment industry, has core operations that range from high precision plating and stamping, to injection-forming molds for aerospace, opto-electronics, automation and semiconductor applications.

Arreza said that IT-related manufacturing firms in the Clark Freeport are in need of support industries to supply precision tooling for IC chips. Subic will create a cluster of suppliers of electronic parts and components, he said.

On the other hand, the TECO Group of Companies has committed to establish a software development park at Subic’s Redondo Peninsula to produce digitalized flat-screen television sets and components.

Arreza said that TECO, which is a leading manufacturer of home appliances, telecommunications equipment, IT systems, electromechanical components, and commercial electronics, also plans to use the Subic Freeport as staging area to train electronic engineers and software designers to fill up the manpower shortage in Taiwan.

“Taiwan does not have enough engineers to support its growth,” Arreza said, pointing out the reciprocal economic agreements that bolster the Philippine-Taiwan economic growth corridor.

TECO will be training Filipino engineers in Taiwan as part of an “inter-company transfer” scheme that will not be subject to Taiwan’s foreign workers quota, he added.

Arreza said the SBMA is bullish about the establishment of Subic’s IT parks after Philippine trade officials agreed to offer rent-free incentives in both the Subic and Clark free ports to high-technology firms from Taiwan.

The incentives, which will be good for five years in Subic and three in Clark, will apply to companies investing at least $25 million, he said.

Arreza said the proposed software parks will not only boost investments in Subic, but will also increase its export production and job creation.

He added that the Philippines should take the opportunity to attract more Taiwanese investments after Vietnam, which has been a leading destination for Taiwanese firms, has experienced a higher inflation rate.

Arreza also noted that China, another major investment center in Asia, has lately become “very selective” in terms of what businesses they would allow to come in.

“The Philippines, specifically Subic and Clark, should now grab this opportunity to go after these high value-added industries from Taiwan,” he said. (SBMA Corporate Communications)