Mr S Iswaran at the official opening of GlobalTRONICS 2008

SPEECH BY MR S ISWARAN SENIOR MINISTER OF STATE FOR TRADE AND INDUSTRY AT THE OFFICIAL OPENING OF GLOBALTRONICS 2008 ON 9 SEPTEMBER 2008 AT 11:00 AM AT EXHIBITION HALL 404 SUNTEC SINGAPORE INTERNATIONAL CONVENTION AND EXHIBITION CENTRE

Your Excellencies,

Distinguished Guests, Ladies and Gentlemen

Introduction

I bid you all a warm welcome, especially those who are visiting us from around the world. I am pleased to join you at GlobalTRONICS 2008, an event which has been staged in Singapore continuously over the last 16 years.

CS is one of the largest electronics design and manufacturing events in Asia.It brings together industry players from the electronics manufacturing industry and provides the one-stop technology and educational platform for the region. This year, the event is expected to attract nearly 3,200 international visitors over four days and will feature over 500 key exhibiting companies from 28 countries. GlobalTRONICS will certainly support the long-term development of our MICE industry and the growth of one of Singapore’s key economic sectors - electronics and precision engineering.

Growth of the Manufacturing Industry with the Electronics Sector as a Key Driver

The continued growth and competitiveness of the electronics sector is important to Singapore as it forms the bedrock of our manufacturing sector. Last year, electronics products[1] accounted for 45 per cent[2] of Singapore’s total exports. According to data from the Economic Development Board, the electronics sector underpinned Singapore’s economic growth last year, contributing an output of S$73 billion and employing more than 90,000 workers.

Nevertheless, we are fully aware of the volatility that characterises the electronics industry. Short product cycles, technology obsolescence and intense competition add to the fast-paced nature and competitive pressures of the industry. According to Singapore’s Purchasing Managers’ Index[3]the electronics PMI dipped to 49.4 in May 2008 - its lowest since June 2006 - largely due to the global slowdown and weaker US demand.

Ascending the value Chain

Consequently, to diversify the activities within electronics, we have identified new areas and are developing our capabilities to move up the value chain. In particular, we aim to secure more capital-intensive projects like the multi-billion dollar wafer fabrication plants, as well as breakthrough projects like the solar cell plant of Switzerland's Oerlikon Solar, and Rolls-Royce's first Asian plant in Singapore to manufacture engines for large commercial aircrafts.

With the emergence of low-cost manufacturing locations, the operations of electronics manufacturing services (EMS) providers in Singapore have also evolved, over the years, from the supply of components into higher value-added activities such as product design, logistics and supply chain management.Venture Corporation Ltd is a good example. Venture’s design operations in Singapore specialise in areas such as mechanical and electronics systems, precision plastic tools, and software development to complement its manufacturing operations. Another example is Allied Technologies’ foray into LCD production. Building on its expertise in metal stamping, assembly services, product design and through technology acquisition, Allied now manufactures and supplies complete LCD monitors to markets worldwide.

Indeed, the strong mechanical and electrical design capabilities of EMS players such as Venture Corporation and Allied Technologies plays an important role in attracting more box-build original equipment manufacturers(OEMs) to move their design activities offshore to Singapore. Together with their established manufacturing base in Singapore, the EMS players serve as a complete one-stop outsourcing solution for OEMs.

The prospects for EMS providers in Singapore are sanguine, and as players undertake more responsibilities - such as full product design and development, and higher value-added manufacturing - they can look forward to growing their operations and enjoying a bigger slice of the electronics manufacturing pie.

Conclusion

Going forward, we will continue to grow our R&D capabilities in Singapore to help our companies stay at the cutting-edge of new technologies, and to continue to offer an open and supportive environment for businesses to implement ventures and projects speedily and efficiently.

To this end, GlobalTRONICS is in line with Singapore’s ambitions of moving towards high value electronics design technology and manufacturing, and is well placed to promote growth in Singapore’s production of PCs, servers, mobile and flat panel televisions amongst other devices. I therefore encourage you to use this platform “to be seen, to be connected and to be global" and I wish you a fruitful time at GlobalTRONICS 2008.

Thank you.

1 Includes office and data machines (SITC 75), telecommunication apparatus (SITC 76) and electrical machinery (SITC 77).

2 Source: Economic Survey of Singapore First Quarter 2008 – Ministry of Trade and Industry

3 Source: Singapore Institute of Purchasing & Materials Management