Why Singapore remains a key player in the global semiconductor race

Why Singapore remains a key player in the global semiconductor race The country produces one in 10 chips worldwide, but rising competition means it cannot afford to stand still, experts say. SINGAPORE: Every smartphone, laptop, electric vehicle and artificial intelligence system runs on semiconductors. As the global race for semiconductors intensifies, Singapore is under pressure to maintain its competitive edge. The country produces about one in every 10 chips worldwide and accounts for around one-fifth of global semiconductor equipment output. The industry contributes about 6 per cent of Singapore's gross domestic product and employs more than 35,000 people. While the ongoing technology rivalry between the United States and China has reshaped global supply chains, Singapore has benefited from companies seeking to diversify their operations across Asia. But industry experts warn that maintaining the country's position will require continued investment in innovation and talent. EMBEDDED ACROSS THE ENTIRE SUPPLY CHAIN Singapore's semiconductor industry dates back to 1968, when multinational chipmakers began setting up manufacturing operations here. Over the decades, it has evolved from assembly and testing operations into an ecosystem spanning chip design, manufacturing, packaging, testing and equipment production. Mr Ang Wee Seng, executive director of the Singapore Semiconductor Industry Association, said one of Singapore's key strengths is the breadth of its semiconductor ecosystem. For example, US chip designers Broadcom and Marvell have design and research operations in Singapore. Qualcomm, also headquartered in the US, and Taiwan's MediaTek are among other global chip companies with a presence here. Further down the value chain, US-headquartered GlobalFoundries and Micron, as well as Taiwan's United Microelectronics Corporation (UMC), operate wafer fabrication plants, producing chips for industries ranging from automotive to AI. Singapore is also home to four of the world's top 10 outsourced semiconductor assembly and test providers – a segment that is growing increasingly critical as chips get more complex. COMPETING IN THE RIGHT LANES Singapore's strength does not lie in producing the world's most advanced chips. Leading-edge semiconductors below three nanometres are still manufactured largely in Taiwan and South Korea. Instead, Mr Ang said the country has carved out a niche in mature and specialty technologies. These are chips built on manufacturing processes that have been in use for years and are valued for their reliability and stability. They are commonly found in vehicles, consumer electronics like Wi-Fi routers and home appliances, as well as industrial robotics. Singapore also excels in areas where manufacturing quality, reliability and ecosystem depth matter most, Mr Ang added. "We are very strong when it comes to specialty, mature and differentiated technology nodes, where reliability, yield, quality and ecosystem depth really matters,” he said. “We compete in the right lanes, not so much by copying what the bigger hubs are doing today … but by being indispensable … and more importantly as a trusted supply chain resilience hub.” PRESSURE FROM REGIONAL RIVALS But Singapore faces increasing competition from countries across Asia that are also wooing semiconductor investments. Mr Ang noted that land, energy, water, talent and costs are all factors such companies consider when deciding where to invest. "Other countries are also putting in very aggressive incentives, building industry parks, and trying to attract the same investment as what Singapore is doing," he added. "The real challenge is whether Singapore can continue to offer the right economics and, more importantly, the right capabilities," said Mr Ang. He added that Singapore's response must go beyond attracting investments. It also needs to ensure workers have the right skills, local firms can move up the value chain and research efforts support emerging technologies such as advanced packaging, power electronics and photonics. BETTING ON TALENT AND INNOVATION To strengthen its position, Singapore is investing in research and development while expanding its talent pipeline. The government has committed S$37 billion (US$29 billion) under its Research, Innovation and Enterprise 2030 plan, which aims to strengthen Singapore's capabilities in strategic sectors, including advanced manufacturing and semiconductors. Speaking at the opening of US semiconductor equipment giant Applied Materials' new manufacturing facility in Tampines on Wednesday (Jun 10), Deputy Prime Minister and Trade and Industry Minister Gan Kim Yong said investments in the sector must help Singapore strengthen its role in global supply chains while creating quality jobs. The facility is one example of the type of investment Singapore hopes to attract as it strengthens its semiconductor ecosystem. The US$500 million project is expected to create about 1,000 jobs and support capabilities in areas such as automation, digitalisation and AI-enabled manufacturing. As competition for semiconductor investments intensifies across Asia, Mr Ang said Singapore should not view its neighbours solely as rivals. Instead, he said Singapore's role should be to connect capabilities across Southeast Asia and help attract investment into the region as a whole. "We should not be looking at each other as competitors but … as partners," said Mr Ang. "Singapore does not need to do everything alone. We can be the orchestrator."