Speech by Minister Chan Chun Sing at the press conference of the sectoral company visit to GlobalFoundries Singapore

1. Good morning everyone. 

2. Over the last few months, Minister Josephine Teo and I have been visiting different companies to show the variety of jobs and opportunities available in the different industries. 

3. The global recovery will be slow and uneven across different sectors. Last week, we visited the retail sector, which is particularly under stress. This week, we are visiting the semiconductor industry, which is doing very well. I will show and share some of the results that they are achieving for this year and the coming years.

4. Recently, people have been very concerned about how our workers will continue to enjoy good wage growth. One of the most important ways is to make sure that the labour market is tight, which means that there must be sufficient job opportunities in the labour market for Singaporeans. 

5. To this end,  MTI and the economic agencies are firing on all cylinders to make sure that we create as many good jobs here as possible, so that we can keep the labour market tight, and so that there will be continued opportunities for our people to achieve good wage growth. 

6. We are firing on all cylinders in a three-prong manner. First, we want to encourage more start-ups to create new opportunities for the next generation of job creation. 

7. The second prong has to do with helping our companies to grow and to scale up. You have seen some of these examples in the last few weeks, from helping the companies move into new products and services, explore new markets to digitalisation and so forth. Hence, the second prong has to do with helping our local companies grow not just domestically, but also regionally. 

8. The third prong of our strategy is an evergreen one, which still remains very relevant today; that is to attract queen bee global companies to come to Singapore, set up their operations here and then to catalyse the local industry. 

9. GlobalFoundries and the semicon industry are one such example. When we started this industry 20 to 30 years ago, we barely had any expertise in this industry. But we progressively built up our capabilities.

10. We started with less than one percent of our value-add coming from this industry. But today, close to seven percent of our GDP comes from this industry. Over the last 20 to 30 years, we have created many good job opportunities for our people in this industry. Some of the workers we have seen, started off as assistant engineers with quite a basic job scope. But over the years, they have grown to become engineers leading different groups of engineering teams and contributing to the global supply chain. And that is how we have benefited our workers. 

11. The other part that comes with this is that it has also benefited our local SMEs. Today we have one example here, whereby because of the work that GlobalFoundries does, it has also allowed an ecosystem of supporting local SMEs to grow with GlobalFoundries and the rest of the semicon industry. 

12. The third benefit we have seen is that what  started off as basic production and operations, we have been able to grow  into research and development, design and so forth - we are constantly moving up the value chain within the industry, and constantly entrenching our role in the global value chain. This is how we can make a living for ourselves in a fast-changing world. 

13. Let me dive into the semicon industry within the third prong of our strategy today about anchoring key multinationals (MNCs) with key capabilities here as part of the global supply and value chains.

14. Notwithstanding COVID this year, the semicon industry has continued to grow steadily. In fact, the prospect for the semicon industry is very bright in the coming years. Mr Tan Yew Kong (Vice President and General Manager, Fab Management, GlobalFoundries Singapore) was just sharing with me that with the advent of the 5G technologies, there will be another cycle of demand for a new generation of chips, which will then propel the industry to the next level. In fact, they are happy to announce that they are at maximum capacity. They have more orders than they can fulfil at this point in time and they are looking to expanding. 

15. As at September 2020 this year, we have already recorded more than $5.7 billion in Fixed Assets Investment (FAI) and more than $376 million in Total Business Expenditure (TBE) in the electronics cluster. This will create more than 1,100 jobs in the next three to five years as the investments are fulfilled. The industry is growing very strongly and have very good prospects. They will be producing the next generation of chips, the 5G chips, for things ranging from the new generation of phones, to electric vehicles, artificial intelligence, and so forth. This will continue to grow and the demand for the chips capabilities will become more and more sophisticated requiring greater depth of technological expertise, both in terms of design and also in terms of manufacturing. 

16. This brings me to another point that I want to emphasise in our strategy to create jobs for Singaporeans. If we move back 20 to 30 years ago, we did not necessarily have all the capabilities, nor the technical know-how. But the preceding generation before us were bold enough to bring in the investments into Singapore, to learn and grow in the process. Today, I can confidently say that the many good jobs that we have in the semicon industry would not have been possible if not for the gumption of the previous generation to bring in those good investments into Singapore and established a foundation for us to have what we have today. 

17. In fact, we are continuing to do that. We have done that for the electronics and the semicon industry, and we are doing that for the bio-med industry. Recently, Thermo Fisher announced their investment in a new production line that can be part of the global production system for the vaccines. We are constantly building up new capabilities. In the last two weeks, you have also heard about the investment by Hyundai to do electric car design, innovation and assembly in Singapore. This will yet create another new set of jobs for future generations of Singaporeans. 
18. Often when we bring in a new industry to Singapore, we may not always have all the capabilities at that point in time. But we must have the gumption to say that this will create good jobs not just for this generation, but also for the next generation. And because of that, we are prepared to bring them in, learn from the best in the world, create those jobs, build up our own capabilities and in time to come, have more good opportunities for fellow Singaporeans here. 

19. If we have not done that, this generation of Singaporeans would not have enjoyed very good opportunities, and this generation of SMEs would also not have been able to partner leading companies of the world and be plugged into the global production and value chains. This is how we have done and will continue doing. From the less than one percent contribution by the semicon industry in 1990s, we are almost at about seven percent contribution to our GDP. Companies like Infineon, Micron, GlobalFoundries are all part of this wider ecosystem.

20. We have been mentioning that this is a crisis of a generation, yet we have every chance to turn this into an opportunity of a generation. If you look at the semicon industry, including GlobalFoundries, the investment environment is very tough at this point in time. However, there are still investors worldwide looking for places which can be a safe harbour for their investments, their talent and their intellectual property. If Singapore plays our cards right to provide that kind of environment where we can service different markets even in a bifurcating or fragmenting world, where people feel safe to put their investments and intellectual property, we can turn this into an opportunity of a generation for us to attract a new generation of investments that will propel Singapore’s growth in the next decade and beyond. 

21. But we must be bold to make sure that we put in place the correct and consistent policies for the long term. When such investments come in – be it in the semicon, biomedical or the emerging electric vehicle industries – we must be bold enough to bring them in, learn quickly, develop our people even though we may not have all the skillsets at this point in time, so that the next generation of Singaporean workers can benefit from these opportunities. 

22. This is how we have done it in the past and we will continue doing this for the future generations. We must never be afraid of not having the skillsets in a particular industry. When EDB and the rest of the economic agencies go round the world to attract investments, we keep asking ourselves which investments will best create jobs for this generation of Singaporeans, and which investments will best create jobs for the next generation. We want job opportunities for this generation, just as we want good opportunities for the next generation. If those good, long term investments are not here today, the next generation of good jobs will inevitably be lost to our competitors and our next generation will end up having to work elsewhere rather than in Singapore. 

23. Hence, we are very determined with our three-prong strategy to make sure we get the best investments in Singapore to create good jobs for Singaporeans for this generation and the next. The three prong strategy comprises our efforts to attract the most promising startup to base out of Singapore and to create the next generation of unicorns of Singapore; to continue to scale up our support for our SMEs and for them to penetrate the global markets. The third prong is to make sure that we continue to remain as an attractive location for global multinationals to come here so that our people can get trained up and our SMEs can form part of a global ecosystem for the global production and supply chains. 

24. If we can do this, we have every opportunity to turn the current crisis into an opportunity of a generation for Singapore to entrench our role in a global production, supply and value chain. 

25. Thank you.