Written reply to PQ on semiconductor chips

Question

Mr Desmond Choo: To ask the Minister for Trade and Industry in view of the global shortage of semiconductor chips (a) how can Singapore leverage on its current semiconductor ecosystem to seize growth opportunities, (b) how will the larger economy benefit from larger semiconductor investment; and (c) how can our workforce prepare for this growth.

Written Answer by Minister for Trade and Industry Mr Gan Kim Yong

1. Singapore has a globally competitive semiconductor industry. Ten of the fifteen largest semiconductor companies, such as GlobalFoundries, Micron, and Infineon, have research and development and/or manufacturing operations in Singapore. These companies have invested here because of our skilled talent, excellent global connectivity, ease of doing business, and well developed semiconductor research and manufacturing ecosystem.

2. The long-term prospects of the industry are bright. Demand for Integrated Circuits (IC) is expected to remain strong as growth drivers such as the adoption of electric vehicles, 5G technology, cloud and Internet-of-Things (IOT) gain momentum. Singapore is well positioned to seize these opportunities. Our semiconductor manufacturing facilities are working at full steam to meet the strong demand and keep supply chains intact. Some are also considering expansion plans. For example, GlobalFoundries recently announced that it would be investing more than S$5 billion to build a new wafer fabrication facility here.

3. Such investments create good jobs for our people, allow us to build up the capabilities of our companies, generate strong spinoffs to other sectors such as precision engineering, and sustain the virtuous cycle that keeps our semiconductor sector vibrant. The semiconductor manufacturing industry employs over 33,000 people and accounted for almost 7% of our GDP last year. Over 1,600 companies, including many SMEs, are suppliers to semiconductor firms here. It is also one of the largest contributors to Business Expenditure on R&D (BERD) and our wider research ecosystem.

4. To maintain the competitiveness of our semiconductor sector, we will continue to forge strong partnerships between companies, research institutes and our universities; strengthen our capabilities in targeted specialty segments; and strive to be the location of choice for companies to establish best-in-class operations. We are investing resources into semiconductor research under RIE2025. EDB is also working closely with our Institutes of Higher Learning and the Singapore Semiconductor Industry Association to ensure we have up-to-date training programmes and that we continue to train job seekers – including mid-careerists who may not have prior experience in the sector – to fill the new, high quality jobs in the industry.