Mr Chan Soo Sen at the Groundbreaking of Panasonic Semiconductor Asia Pte Ltd’s Expansion Site for Assembly and Test

Speech by Minister of State for Trade & Industry AND EDUCATION, Mr Chan Soo Sen, at the groundbreaking of Panasonic Semiconductor Asia Pte Ltd’s Expansion Site for Assembly and Test on 7 february 2006, 10.15am

Dr Susumu Koike

President of Semiconductor Company in Matsushita Electric Industrial Co., Ltd

Mr Tomio Kawabe

Managing Director of Panasonic Asia Pacific Pte Ltd

Mr Akinobu Minagawa

Managing Director of Panasonic Semiconductor Asia Pte Ltd

According to the lunar calendar, today is within the 15 days of the Chinese New Year celebrations. According to the Chinese custom, married adults are supposed to give out red packets, or ‘ang pows’ during this period. Today, Panasonic Semiconductor Asia, or PSCA, has given Singapore a big ‘ang pow’ with this $150 mil expansion. Over the next 5 years, an additional 500 people will be able to work in the new premises.

Matsushita’s Unwavering Commitment to Singapore

In fact, the group of 10 Matsushita companies in Singapore, of which PSCA is part of, has been giving Singapore ‘ang pows’ over the years. Our relationship with Matsushita started when Matsushita Denshi (MECS) was set up in 1978. Then, it was the only Matsushita semiconductor assembly and test facility outside Japan.

Since then, the Matsushita group has grown and weathered many storms with us. I would like to share two incidents where Matsushita displayed its unwavering support for Singapore.

The first incident happened in the early 1990s when the semiconductor market was fluctuating. Inevitably, Singapore faced similar uncertainties with the rest of the world, and so did Matsushita’s business here. But instead of packing up and leaving, Matsushita restructured its business and looked at other projects they could undertake in Singapore. In 1990, Matsushita invested $25 mil in a fluorescent lamp manufacturing facility. The fluorescent lamp operation was able to cushion the ups and downs of the semiconductor industry and helped

The second incident happened more recently in the early 2000s. Again, the global economy was not doing very well and Singapore was facing a lot of challenges. Despite the downturn, Matsushita continued to invest, and more than doubled its investment in Singapore. Matsushita invested in the production of Laser Detector Hologram Units in 2000, which paved the way for the transfer of the production of Charge Coupled Devices (CCD) to Singapore in 2003. This was the first time that the production of CCDs, which are used in digital still cameras, was set up outside of Japan.

So, for standing by us and believing in Singapore throughout the years, we thank you.

Semiconductor Industry: Buoyant Growth; Increasing Vibrancy

In a sense, the growth of Matsushita’s operations in Singapore throughout the years, mirrors very closely, the growth of Singapore’s semiconductor industry. Singapore’s semiconductor industry started some 36 years ago. In 1969, we welcomed the first chip assembly and test plant by National Semiconductors. Everyone was excited because semiconductor plants were a great source of jobs. In the 1980s, the industry grew to include wafer fabrication and Integrated Circuits (IC) design operations.

Today, the industry is developing very well. All parts of the semiconductor value chain including research and development, manufacturing and HQ activities can be found in Singapore. Today, we have 14 wafer fabs, including the world’s top 3 wafer foundries. In 2004, Singapore accounted for about 10% of the world’s wafer foundry output.

In the area of ICs, we are home to 40 IC design companies today, including 4 of the world’s top IC design companies. In assembly and testing, we already have 20 chip assembly and test operations, including the top 3 assembly and test subcontractors.

In 2004, the semiconductor industry accounted for 39% of the total electronics output in Singapore. This momentum was carried through strongly into 2005.In 2005, we saw a range of investments in the semiconductor industry from both the multinational companies and newer players.

For instance, US companies Xilinx, Linear Technology and Micron announced their expansion plans. Avago and Infineon consolidated their activities in their headquarters here. And STMicroelectronics, already a big player in Singapore, shifted more product lines here.

Adding to this vibrancy are new players too. Germany’s Schott AG opened a new wafer-level packaging plant in April 2005, its only volume plant worldwide. From around the region, we have Tessolve, which is our first test engineering services provider from India, and from South Korea, we have Nepes, which entered into a joint venture with United Test and Assembly Centre Ltd (UTAC) to build Singapore’s first wafer bumping facility.

Last year was a fruitful year for the semiconductor industry. This year, PSCA has provided Singapore with a good head start. Today’s groundbreaking adds to our confidence that it will get better.

I was told that the new facility will carry out the assembly and test of devices using 65nm technology node. This is a high value-added activity and we are glad that Panasonic is able to find the capabilities they need for this activity here.

Conclusion

The Matsushita group is a long term investor in Singapore. We value the company’s contributions to our economy and I look forward to deepening this partnership further in the future.

I wish PSCA every success and I would like to end by wishing everyone a healthy and prosperous year ahead.

Thank you.