Mr Lim Hng Kiang at the Opening Ceremony of Applied Materials’ Singapore Operations Centre, 13 Apr 2010

SPEECH BY MINISTER FOR TRADE AND INDUSTRY, MR LIM HNG KIANG, AT THE OPENING CEREMONY OF APPLIED MATERIALS’ SINGAPORE OPERATIONS CENTRE, 8 UPPER CHANGI ROAD NORTH, ON TUESDAY, 13 APRIL 2010, AT 4.00 PM

Chairman and Chief Executive Officer, Applied Materials, Mr. Mike Splinter,

Executive Vice President and General Manager of Silicon Systems Group, Applied Materials, Mr. Randhir Thakur,

President of South East Asia, Applied Materials, Mr. Russell Tham,

Distinguished Guests,

Ladies and Gentlemen

Good Afternoon. I am pleased to join you for the opening of Applied Materials’ Singapore Operations Center. The center will serve as Applied Materials’ largest semiconductor manufacturing and consolidation center in Asia and represents a major milestone in our partnership with Applied Materials.

Manufacturing in Singapore – knowledge-based and innovation-driven

Manufacturing remains an important pillar of the Singapore economy. We continue to believe that the manufacturing sector can contribute between 20 to 25% of Singapore’s GDP.

Over the years, our manufacturing activities have become increasingly knowledge-based and innovation-driven. A good example is the growth of the semiconductor sector. Through concerted efforts and investments in infrastructure, talent and R&D, the semiconductor industry now produces about 11% of the world’s wafer output. The industry boasts 40 integrated circuit design outfits, 14 operating silicon wafer fabrication plants and 20 assembly and test houses and employs approximately 40,000 people.

With such a strong manufacturing base, Singapore has been a top choice as an Asian base of operations for many leading semiconductor equipment manufacturers who seek to be closer to their major suppliers and customers. This strong manufacturing base has also been important in enabling our manufacturing sector to progress towards more intricate manufacturing processes such as complex equipment manufacturing.

Complex equipment manufacturing requires skill intensive production techniques. Semiconductor equipment, machine tools, assembly, test and measurement equipment are good examples of complex equipment. To support the further growth of the manufacturing sector in this area, the government has put in place several initiatives. These include strengthening our base of engineering talent, building wide ranging supplier capabilities and developing the core technologies required. Let me elaborate on these initiatives.

Developing Engineering Talent

Building complex equipment is skill and knowledge intensive. A full spectrum of talent, ranging from highly skilled craftsmen to R&D engineers, is necessary to support a strong complex equipment manufacturing base. Recognizing this, the government launched a $76 million precision engineering manpower initiative in 2007. It sought to develop a new generation of technical talent with design and integration capabilities. A key part of this initiative is the Digital and Precision Engineering Diploma conducted at Nan yang Polytechnic. With 230 students enrolled so far, the programme is targeting to train 600 students by 2012.

Under the same initiative, some 80 students are currently being rained at the Institute of Technical Education for the Technical Engineer Diploma in Machine Technology. A structured in-employment upgrading programme known as the National Precision Engineering Specialist Programme was also developed. To date, 220 employees from 70 companies have undergone this training.

Supplier Development

Apart from developing engineering talent, the Government is also helping to deepen and expand supplier capabilities in Singapore. To support a vibrant complex equipment base, our suppliers must also ensure that they remain in the forefront of technology and continue to develop capabilities by forging strategic partnerships with industry leaders. A capable Singapore supplier base would also allow Original Equipment Manufacturers (or OEMs) companies to respond quickly to their customers, providing timely deliveries and high quality equipment.

We will also leverage on the presence of technology leaders like Applied Materials as strategic partners to develop suppliers for their manufacturing operations here. At this year’s Budget, the Government had announced the Partnership for Capability Transformation (or PACT) scheme. This will support both OEMs and suppliers in manufacturing qualification and certification.$250 million has been set aside for this initiative which will help lower the barrier for locally-based suppliers to gain entry into new and demanding markets.

Developing Core Technologies

The Government is also investing in the development of core technologies necessary to support complex equipment manufacturing. The Singapore Economic Development Board and SPRING Singapore are working closely with SIMTech, a publicly funded research institute to develop manufacturing technologies and know-how that will help increase the competitiveness and productivity of Singapore manufacturing industries. The institute collaborates with both multinational and local companies in key component technologies. This includes optics and fluid dynamics, new materials such as composites and alloys, as well as advanced manufacturing processes comprising micro and large format machining.

With these initiatives, we hope to further strengthen our bid to become a global hub for complex equipment manufacturing. As an industry leader in complex Nano manufacturing technology, Applied Materials’ decision to set up its Singapore operations center is testament to our efforts in this regard. The presence of leading companies such as Applied Materials will also add strategic depth to our engineering and technological capabilities. For example, I understand the center practices lean manufacturing, a production practice aimed at eliminating waste and anything that does not add value to the final product.

Conclusion

In conclusion, I thank the Applied Materials’ leadership team for your continued trust and confidence in Singapore. I am confident that this expansion will bring new opportunities and set the stage for the continued growth of the Applied Materials–Singapore partnership. I extend my warmest congratulations to the management and staff of Applied Materials on the opening of the Singapore Operations Centre. I wish you every success.