Speech by MOS Alvin Tan at SSIA Semiconductor Business Connect 2021

Ms Jennifer Teong, Treasurer of the Singapore Semiconductor Industry Association

Ladies and Gentlemen,

Good morning.

2. Thank you for inviting me to the Singapore Semiconductor Industry Association (SSIA) Semiconductor Business Connect 2021.

3. I apologise for not being able to be there in person. I just returned on Sunday morning from the G20 Energy & Climate Ministerial Meetings in Italy and am currently serving isolation at a hotel.

4. That I’m able to deliver my speech virtually is something that we now take for granted in a COVID-19 digital ZOOM world. But what many people don’t realize, is the role of our semiconductor industry in making these kind of virtual interactions possible.

5. If we ZOOM in, we’ll see that semiconductors are in the very technologies that make this happen. I’ve said this many times before: semiconductors are in fact the building blocks of digital technology. So thank you for making this possible!

COVID-19 has presented both challenges and opportunities in the semiconductor industry

6. COVID-19 has profoundly impacted everyone. Many businesses continue to face supply chain disruptions and manpower challenges due to the travel restrictions.

7. Despite these obstacles, I’m grateful that semiconductor companies have managed to keep production going to meet the heightened global demand for your products.

8. Today, Singapore accounts for about 5% of global wafer fabrication capacity and 19% of the global semiconductor equipment market share.

9. That is quite remarkable for a country of Singapore’s size. Think about it – we have less than 0.1% of the world’s population and less than 0.001% of the world’s land resources, yet we produce almost a fifth of global semiconductor equipment.

10. That is no coincidence. Companies invest here because of our skilled talent, our global connectivity, ease of doing business, and well-developed semiconductor research and manufacturing ecosystem.

11. These are strengths which we take very seriously and obsessively build upon, because they differentiate us from our competition, and allow us to continue to serve the world’s needs from this little red dot.

12. Our semiconductor industry has grown healthily in the last year.

a. As you all are well aware, the pandemic has spurred global demand for consumer electronics and digital services, causing a surge in demand for semiconductors to power these technologies.

b. We expected this semiconductor ‘super cycle’ to persist as the application of new tech like Artificial Intelligence (AI), Internet of Things (IoT) and 5G fuel the industry’s growth in the longer term.

13. These trends present an opportunity for Singapore to capture growth in the semiconductor industry.

14. However, we now find ourselves in a very different operating environment. Why? Because semiconductor chips are viewed as a strategic resource by many countries. The competition to attract and anchor such investments has therefore intensified.

a. For Singapore to strengthen our value proposition and semiconductor ecosystem, our companies must be equipped to build new capacity and capabilities.

b. It is therefore fitting that this event is themed “Emerging Stronger – Innovate, Connect and Collaborate”. Let me elaborate.   

Innovate – semiconductor companies can lead the digital transformation of manufacturing

15. First, semiconductor companies must continue to innovate – by adopting digital transformation to become even more competitive.

16. Technological advancement is changing the face of manufacturing and creating new opportunities for companies.

a. Leaps in computing power have enabled advanced AI and analytics. Additive manufacturing has transformed production processes and repair cycles. IoT and the use of digital twins have transformed traditional production lines into dynamic, interconnected systems.

17. We have companies that are upgrading and transforming their operations here to stay globally competitive. For example,

a. GlobalFoundries introduced new autonomous robotics and automation in its fabs, to rely less on direct labour and employ higher-skilled workers.

b. UTAC acquired wafer bumping assets in Singapore earlier this year, which has enabled them to provide full turn-key Wafer Level Chip Scale Package (WLCSP) services in Singapore to all their customers.

18. Besides strong and capable companies, the semiconductor industry needs a robust network to find new business opportunities and adopt advanced manufacturing solutions. So in addition to innovating – which is my first point, we need also to connect, which brings me to my second point.

Connect – Building up industry networks and tapping on the industry for growth

19. Semiconductor companies must connect and leverage industry networks to seek new business growth opportunities. 

a. SSIA has been a strong partner in strengthening networks among industry players. They create useful platforms such as today’s event, for industry players to come together and discuss how to push boundaries even further in the semiconductor industry. I’m a big fan and friend of SSIA, Andrew, Jennifer, Wee Seng and their team, and will always be here to support their efforts.

20. In Singapore, we have a robust local supplier base that businesses can connect with and leverage.

a. Today, 46% of Singapore’s local precision engineering companies – more than 1,000 firms – serve our semiconductor industry.

b. Many of these firms provide automation and process monitoring solutions to larger semiconductor players. These are highly advanced and complex solutions, for example producing wet chemical etchers and inspection machines, or designing customized AI and i4.0 automation solutions for the industry. So connect with them, then collaborate with them, which brings me to my third point.

Collaborate – Leveraging on partnerships to push boundaries and uplift the semiconductor industry

21. Manufacturing companies will face greater pressure to rethink their business models and manufacturing operations as the industry expands. Companies must therefore upgrade their capabilities and develop talent to remain competitive. This is where collaboration – my third point – is important.

22. Our semiconductor industry provides many exciting job opportunities for locals across the diverse activities in the value chain. This includes new roles such as data scientists and AI analysts, which will continue to grow as tech adoption accelerates.

23. Public-private collaborations can help take this talent and capability development one step further.

a. For example, for job-seekers exploring a career in the industry, the Economic Development Board (EDB) and Workforce Singapore (WSG) are co-organising a two-week virtual career fair from 16 August to 6 September 2021. The event will give job-seekers the opportunity to learn about the industry and training schemes available. Do visit the WSG website to find out more.

b. Another example is the Semiconductor Vision 2020, a taskforce set up by EDB and a well-represented community of semiconductor companies – including foundries, equipment and Assembly & Test (“A&T”) companies. This taskforce helps groom the next generation of semiconductor leaders collaborates on national efforts to improve labour productivity and energy efficiency and facilitates formal industry consultations for R&D and strategic alliances.

24. Industry collaborations are also important channels for businesses to grow.

a. The industry established the SME Local Ecosystem Improvement Committee in October 2020 to convene global and local industry leaders to strengthen the local semiconductor ecosystem through closer collaboration between manufacturers and their suppliers. These include global and local industry leaders like GlobalFoundries, Applied Materials, Micron and Denselight.

b. In the area of capability development, partnerships such as the Model Factories @ SIMTech, Advanced Remanufacturing and Technology Centre (ARTC) and the National Robotics Programme (NRP) continue to drive innovation and uplift the semiconductor ecosystem.

25. Our Government will continue to work with industry partners to facilitate these partnerships and collaborations. We will also build the ecosystem required to nurture new capabilities among companies in the semiconductor industry, as part of our broader drive to strengthen our manufacturing sector and achieve our Manufacturing 2030 vision to become a global business, innovation and talent hub for advanced manufacturing.

Conclusion

26. Let me conclude by underscoring the need for our companies to innovate, connect and collaborate to seize new opportunities and emerge stronger from the COVID-19 pandemic.

27. Semiconductor Business Connect 2021 will bring us one step forward on that continuous journey. I encourage all participants to take this opportunity to exchange ideas, network and forge new partnerships that can help us push the boundaries in the semiconductor industry.

28. I wish you all a fruitful session ahead. Thank you.