The Rise of AI: Transforming Industries and the Role of Semiconductors in Legal Practice
With the advent of new technology particularly Artificial Intelligence or AI, new fields of industry will expand in the coming years to fill in the demands of the times. In recent months, the strides made by AI have been unprecedented. For a long time, an individual who wishes to search the internet will utilize Google as a default search engine. However, Google now has a formidable competitor in the name of ChatGPT.
ChatGPT is renowned for its use of AI. Through AI, ChatGPT provides its users with conversational, natural language answers with direct citations, allowing them to engage in follow-up questions within the same context while ChatGPT presents a list of links to relevant web pages, requiring users to navigate through multiple sources to find information. While its might and utility might have taken the world by surprise, ChatGPT and AI require an essential tool for its operation — semiconductors.
For law firms, the implications of AI are significant. Legal professionals can utilize AI tools for research, document analysis, and client interactions, increasing efficiency and accuracy. However, the remarkable power of ChatGPT and similar AI technologies hinges on a crucial component: semiconductors. These tiny chips are the backbone of modern computing, enabling the processing power necessary for AI applications. As AI continues to evolve, the demand for advanced semiconductor technologies will only grow, driving innovation and reshaping the landscape of multiple industries, including the legal field.
Understanding Semiconductors: The Foundation of Modern Electronics
A semiconductor is a material that can be used as the basis for computers and other electronic devices because of certain electrical characteristics. Generally speaking, it is a solid chemical element or compound that, in some circumstances, conducts electricity but not in others. Because of this, it is the perfect medium for controlling electrical current and common electrical appliances.
A solid understanding of semiconductors is essential, especially in intellectual property, patent law, and technology regulation. As demand for this technology grows, legal professionals must navigate the complexities of technology licensing, compliance, and potential litigation related to innovations. The ability of semiconductors to control electrical flow is crucial for applications like microprocessors in computers and sensors in everyday devices, driving technological advancements that pose significant legal challenges and considerations.
Strengthening Semiconductor Ties: The Impact of the CHIPS Act on the Philippines
Recently, the 117th United States Congress enacted the CHIPS Act (“Creating Helpful Incentives to Produce Semiconductors”) and signed into law by US President Joe Biden. The law created the International Technology Security and Innovation (ITSI) Fund strengthening the US State Department’s collaboration with the Philippines Government to explore opportunities to grow and diversify the global semiconductor ecosystem. Under the CHIPS Act, the State Department commits itself to further investments in partner countries like the Philippines, especially in capacity building such as workforce development and crafting policies that will attract investments from US companies.
The US-based Semiconductor Industry Association (SIA) recognized the Philippines as a critical player in global semiconductor assembly and test manufacturing. 99 percent of the US semiconductor industry by revenue and two-thirds of the non-US chip firms are represented by SIA.
In a statement, the Board of Investments (BOI) said SIA president and CEO John Neuffer and VP for Global Policy Jimmy Goodrich recently paid a courtesy visit to Trade Undersecretary and BOI managing head Ceferino Rodolfo earlier this week. The visit aims to establish the groundwork for the expansion of the Philippines’ semiconductor industry. Neuffer said,
“While the CHIPS Act aims to increase the capacity of the US semiconductor industry, we recognize that we cannot do it all in the US. And that’s where countries like the Philippines have an opportunity. The CHIPS Act encourages manufacturing in the US, but rather than reshoring all manufacturing activities, it is more of rebalancing the supply chain,” Neuffer said.”
The Philippines: A Promising Landscape for Foreign Investment in Electronics
The local semiconductor industry, as part of the electronics industry, is one of the top contributors to the country’s manufacturing gross value added (GVA), accounting for seven percent of the total manufacturing GVA from the first quarter to the third quarter of 2022, and employs over three million direct and indirect workers. In fact, in November 2022, cumulative electronics exports reached $45.63 billion, or 62.36 percent of the total Philippine exports.
With the passage of the CHIPS Act and a conducive business climate, it is expected that foreign corporations will pour investments into the Philippines’ semiconductor industry. Foreign corporations, particularly within the Philippine jurisdiction, are regulated under several laws and legal doctrines to ensure compliance with local business practices, taxation requirements, and corporate regulation. Understanding the comprehensive legal framework governing foreign corporations in the Philippines requires analyzing the relevant provisions under the Revised Corporation Code of the Philippines (Republic Act No. 11232), the Foreign Investments Act (FIA), tax legislation, and judicial principles.
Moreover, understanding the benefits of the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act will help foreign corporations intending to do business in the Philippines. The CREATE Act can grant incentives for up to 40 years for highly desirable projects with a minimum investment capacity of PhP50 billion, or roughly more or less US$1 billion or at least 10,000 job generation.
Abo Law Firm: Guiding Foreign Corporations in the Philippines
Consulting with a Philippines law firm ensures that doing business in the Philippines by a foreign corporation will be subject to compliance with rules and regulations. Regulatory compliance not only helps avoid criminal, civil, or administrative liabilities but also translates to profitability and productivity. Moreover, with proper legal advice, foreign corporations can flourish in the Philippines by availing of benefits and incentives granted by tax laws.
Abo Law Firm is a full-service firm that caters to both domestic and foreign corporations. The firm is an expert in business registration and other legal solutions for businesses intending to enter the Philippine market. With extensive knowledge of technology regulation, intellectual property, and investment policies, Abo Law Firm, as a leading Philippine law firm, supports its clients in navigating the complexities of establishing and growing their operations in this emerging semiconductor hub.
