What is Pax Silica? What are its goals, and what concerns does it raise?

MANILA, Philippines – In December 2025, the US established the Pax Silica, a coalition formed to counter China’s strength in the tech manufacturing sector, particularly in the fabrication of computing components and chips, and procurement of valuable rare earth materials necessary for those components. 

China is said to control 90% of rare earth refining that allows for the manufacture of advanced chips. In 2025, the country implemented rare earth controls in response to US tariffs. This ability of China is a significant reason why Pax Silica was created. 

There are nine original members: United States, Japan, South Korea, Singapore, United Kingdom, Israel, United Arab Emirates, and Australia — all of which are supposed to bring something to the table as far as securing the “silicon supply chain” goes. 

Later, Finland, Sweden, Qatar, and India would join. 

It underscores the importance of compute and artificial intelligence dominance, just as “oil and steel” ran the “20th century,” said Jacob Helberg, the US undersecretary of State for Economic Affairs. 

He said, “If the 20th century ran on oil and steel, the 21st century runs on compute and the minerals that feed it.”

Helberg said that this initiative ensures “aligned partners build the AI ecosystem of tomorrow — from energy and critical minerals to high-end manufacturing and models.” In Helberg’s language, in mentioning “aligned partners,” it is clear that there is a demarcation between the US and its rivals. 

In April, the Philippines also became part of the program.

What do the countries bring to the table? 

The Electronic Engineering Times (EE Times), a US electronics industry magazine, highlighted some of the strengths of the partner countries, which were chosen for their “control over key choke points in the semiconductor value chain.” 

Japan holds a “chemical chokepoint.” The Center for European Policy Analysis says, “Japanese companies JSR, Shin-Etsu, and Tokuyama dominate the chemicals needed in EUV (extreme ultraviolet) lithography machines needed to etch silicon chips. Japan is also strong in silicon wafer manufacturing, with Shin-Etsu Chemical and SUMCO among the world’s largest suppliers.” 

Japan had long tried to reduce dependence on China after a spat in 2010 had the latter imposing a rare earth embargo on the former. Since then, Japan has reduced its dependence on China from 90% to 60% in 2025. 

South Korea is home to Samsung, and the lesser known but equally important SK Hynix. The two are part of the world’s “big three” in computer memory production, also vital to AI, along with the US’ Micron Technologies. Its participation carries business risk, said the EE Times: “Seoul is taking a significant risk by prioritizing Washington’s security guarantee over access to China’s market.” 

American companies are building data centers in the UAE. In May 2025, the White House announced a data center campus in Abu Dhabi, together with the Emirati firm G42, that has a massive planned capacity of 5 gigawatts. 

For context, the US has a data center capacity of around 40 gigawatts.

Singapore, the first Southeast Asian nation in the alliance prior to the Philippines, holds about 1.4 gigawatts, and is the regional leader. It also produces 10% of the world’s chips, and 20% of semiconductor equipment. 

The build-out of data centers in times of conflict carry risks. At the start of the war, Iran targeted Amazon data centers in the UAE in attempts to cripple digital operations.

If part of the Philippine plans for Pax Silica is to build data centers as well — with the Department of Information and Communications Technology (DICT), as early as last year, heading the call to build data centers — the country should be aware of the risk of these facilities being targeted in the event of a conflict. 

Australia holds critical minerals as well. The firm Lynas Rare Earths is the largest producer of rare earths outside China, whose revenues have recently been growing as “customers seek to reduce reliance” on China, Reuters reports.

UK and Israel are said to respectively bring “standards-setting and intelligence alignment,” and “high-end AI and defense-related” technology, according to Fortune. 

Taiwan, known for manufacturing the world’s most advanced semiconductors, is not officially part of the alliance but was present at the Pax Silica Summit in December where a US official said that it “contributed a great deal to the meeting.”

The Netherlands was also at the summit, but is not an official signatory as well. It is home to ASML, the world leader in lithography equipment, and makes $200-million  machines that print complex circuits on silicon wafers through ultraviolet light. These are said to be some of the “most complicated devices ever made.”

From a tech advancement standpoint, the Netherlands and Taiwan are two of the most important countries. Their not being official signatories to the initiative has been highlighted in various reports.

The Washington International Trade Association said that the Netherlands “joined as non-signatories only after intense bilateral engagement with Washington. The hesitation reflected domestic concerns about subordinating industrial policy in a European Union member state to US priorities.”

As for Taiwan, Helberg said that there are bilateral talks between Taipei and the US. “Give us a little bit of room to let sensitive conversations unfold on a bilateral basis,” the undersecretary said when asked whether Taiwan could be a full participant to the initiative, according to Focus Taiwan.

Olivia Shen from the United States Studies Centre at the University of Sydney told TaiwanPlus that the initiative is the US recognizing that “it can’t win the AI race on its own.”

Prior to the Philippines, the latest addition to the alliance was India. India’s inclusion in the alliance is similar to why the UAE was brought under it: to promote the American tech stack, and block China off. India imports 30% of its chips from China, but also has agreements with the US on critical minerals and tech innovations. 

One member of parliament in India criticized the move, called the US-led project a step towards digital colonialism, and urged the government to reveal all the terms of agreement. 

The Philippine picture

Compared to members such as Taiwan, Singapore, Japan, the Philippines’ semiconductor industry is focused further down the value chain, specializing on chip assembly, testing, and packaging capabilities.

Semiconductors “consistently account for over half of the Philippines’ total merchandise exports,” the ASEAN Business Advisory Council said. 

“Electronic exports comprising semiconductors as the dominant component, reached approximately US$46 billion in 2022, before easing slightly to US$41.9 billion in 2023 and US$39.1 billion in 2024… underscoring the sector’s central role in sustaining the country’s trade performance and its integration into ASEAN’s semiconductor value chain.” 

A statement from a Philippine official indicates that the country’s participation hopes to help move the country up the value chain. “By joining Pax Silica, the Philippines is ensuring that our mineral resources and strategic location are not simply supporting global industries from the margins, but are actively harnessed to build the industries of the future,” Finance Secretary Frederick Go said.

An expert quoted by the South China Morning Post also believes that the hub can help “move the country towards higher-value activities, supported by technology transfer, upskilling and improvements in infrastructure.”

Even way back in July 2025, a report said that the US was eyeing the Philippines as a way to counter China’s control on rare earth materials. Eventually the two countries finally signed the critical minerals framework in February 2026. 

Dr. Rene Claveria of the Ateneo de Manila University’s Environmental Science Department noted that “geological surveys from the 1970 to 1980s have already identified potential areas of REEs (rare earth elements) in the Philippines, most of which are in Palawan.” 

These resources are largely untapped, according to The Diplomat, referring to the country’s reserves of copper, gold, nickel, zinc, and silver. In 2024, “only 5 percent of these reserves have been explored, and just 3 percent are covered by mining contracts.” 

Industrial hub

An industrial hub for AI will be built on a 1618-hectare property in New Clark City in Tarlac under Pax Silica. It has been designated as a “Golden Node”. 

A node, Helberg said, is about “building the manufacturing ecosystems of the next century — AI-native from day one, anchored in the rule of law, and integrated into a network of trusted nations that will define global supply chain resilience for decades to come.” 

The hub will be designated as an “Economic Security Zone” to be managed through what the US Embassy called as “joint governance.” It said: “The two governments intend to identify appropriate frameworks for the long-term development of the Zone that facilitate sovereign alignment and shared upside as it scales.”

Details are currently sparse on this framework of joint governance, and what the terms of agreement will be for the special zone — details that need to be made transparent for the public. 

A subordinate role, military applications, call for scrutiny

Criticism has come as to potential negative effects of the initiative, and how it may bring harm to the Philippines. 

The Kilusang Magbubukid ng Pilipinas (KMP) centers its criticism on the claim that Pax Silica represents a “massive sellout” of Philippine resources to foreign interests, particularly the United States.

While framed as an economic security initiative that will bring jobs and revenues, the group argues it locks the Philippines into a subordinate role — exporting raw materials and performing low-value manufacturing while higher-value technology, control, and profits remain abroad.

A major line of complaint is the project’s anticipated impact on land use and rural livelihoods. The proposed zone is seen as accelerating land conversion, potentially displacing agricultural production in areas that currently support rice, coconut, and other food systems. 

The group also raises environmental concerns, pointing to the likelihood of expanded mining in provinces already affected by ecological degradation. So-called “special zones” also invoke historical environment contamination reportedly linked to past US military installations in Subic and Clark.

Finally, KMP frames Pax Silica within a broader geopolitical and militarization context. It argues that the integration of industrial zones with expanding US-Philippine military cooperation — including joint exercises — raises the risk that civilian areas could become strategic targets in the event of conflict. 

The Computer Professionals Union (CPU) and the Makabayan bloc also made similar statements, stating that the hub may aid the US in military applications.

The CPU also said: “The Philippines will be part of a long supply chain where it keeps only an insignificantly small part of the profits and benefits to production. There is no genuine proclamation of developing and manufacturing long-term actual innovations for Filipinos…”

“This direction will further subordinate the Philippines to US strategic priorities and expose our people, economy, and environment to heightened risks,” Makabayan said, and called for full transparency and scrutiny over the deals. – Rappler.com