Speech by MOS Alvin Tan at the Singapore Semiconductor Industry Association (SSIA) Summit 2020

Mr Ang Wee Seng, Executive Director of the Singapore Semiconductor Industry Association, 

Ladies and Gentlemen, 

1. Good afternoon. Thank you for inviting me to speak at the Semiconductor Industry Association Summit 2020. 

2. We meet today in unusual circumstances. If not for COVID-19, we would be gathered physically for the Summit, exchanging views with familiar faces and new contacts. Today, we are meeting virtually over Zoom, a digital platform that we have become so familiar with today.  A very big part of this is only made possible because of the work done by the semiconductor industry behind the scenes to support development of the digital platforms, equipment and tools. 

Semiconductor Industry in Singapore

3. Semiconductors are critical components that power the technologies of today and tomorrow. Without the advancements in semiconductor design and manufacturing, there would not be Instagram, Facebook or Tik Tok. And in this same spirit, the semiconductor industry has also been a key pillar of Singapore’s economy. It has come a long way since 1969 when the first manufacturing plant was set-up. Today, the industry is a vibrant and comprehensive ecosystem, with top global firms and local players involved in activities across the entire value chain. 

4. As the semiconductor industry evolved and transformed, the activities in Singapore did so as well – moving towards knowledge and capital-intensive manufacturing of high-value components, as well as design and research and development (R&D) activities. The next generation of technology innovations such as autonomous vehicles and 5G-enabled ecosystems will be fuelled by breakthroughs in semiconductors. These new application areas will be long term growth drivers for the industry and our semiconductor companies will continue to play an important role in the global technology value chain

Digitalisation Opportunities and Challenges

5. The global digitalisation efforts are not new; but have accelerated in part because of the constraints placed on physical connectivity by COVID-19. Businesses and consumers have been compelled to experiment with and adopt technology-enabled alternatives as work-from-home, digital meetings and remote-learning becomes the norm. While this will pose some challenges to businesses, the drive to digitalise more effectively will also provide new areas of opportunities. Let me highlight some of these areas. 

(a) 5G. The continued efforts by governments globally to roll-out 5G despite the COVID-19 pandemic is encouraging and will help drive demand for the design and integration of semiconductor chips into new platforms and devices. In Singapore, the Infocomm and Media Development Authority (IMDA) has worked with PSA, Maritime and Port Authority of Singapore, Singtel and M1 to explore the use of 5G in the Maritime industry for automated guided vehicles and automated rubber-tyred gantry cranes. A*STAR, SingTel and JTC will also work towards accelerating Singapore’s Industry 4.0 transformation by deploying 5G at A*STAR’s Advanced Remanufacturing and Technology Centre (ARTC). 

(b) Looking global. Given the global drive for digitalisation and increased cross-border trade connectivity, businesses should continue to look for opportunities in the region and globally. With the centre of gravity of global consumption shifting towards Asia, Singapore is well-placed as Asia’s advanced manufacturing hub. Singapore is also committed to keeping supply chains and businesses open and ensuring a robust intellectual property (IP) regulations. These will set the stage for our semiconductor companies to innovate and produce high-value products in Singapore and use Singapore as a reliable forward deployment storage hub. AEM Holdings, a global leader which offers application-specific intelligent system test and handling solutions for the semiconductor industry and serves companies in the advanced computing, 5G and AI business is an example of a company that has internationalised and secured opportunities globally. While still having its headquarters based in Singapore, it is also present in eight other countries, performing R&D, manufacturing and field support services. 

(c) Leading the digital transformation of manufacturing. There is also potential for the semiconductor industry to take lead in transforming the manufacturing sector in Singapore, through implementing digitalisation, automation and productivity initiatives. For instance, leveraging on Industrial Internet of Things (IIOT) solutions for equipment maintenance offers the benefit of real-time visibility on equipment performance and enables predictive maintenance. This is not only effective in reducing repair costs and downtime but could also be an opportunity to adopt digitalisation to transform business models and better position the company to leverage opportunities amid the crisis. 

(i) Micron and Infineon, for example, have gone from being integrators of technology to becoming adopters of these digital tools. Both companies have been recognised for their efforts and leadership in applying digital solutions of the Fourth Industrial Revolution, such as Artificial Intelligence (AI), Data Analytics and automation, to drive their operations and efficiency, and were inducted into the World Economic Forum’s Global Lighthouse Network. We hope to see our Small and Medium Enterprises (SMEs) also tap into these digital solutions to drive their growth. With these industrial leaders in our midst, I encourage the community to come together and share their experiences from leveraging technology to improve their businesses. The exchanges and sharing will go a long way to help raise the industry’s competitiveness and help Singapore’s semiconductor industry to be recognised as being at the forefront of technology. 

(ii) On building up industry networks, I would also like to thank Singapore Semiconductor Industry Association for their efforts in partnering us to help the industry strengthen the adoption of digital solutions to raise operational efficiency and productivity. The SSIA organises the annual Automation Supplier Day to match digital solution providers to potential customers. They have also organised the Complex Equipment Consortium and brought together a committee of 19 companies to share best practices and discuss automation adoption in the semiconductor industry. I encourage our companies to continue leveraging on the networks and support that SSIA provides. 

Building stronger capabilities to emerge stronger

6. We recognise that the increasing adoption of digitalisation initiatives may require our businesses to go through some structural changes and for the workforce to be equipped with new skillsets. In this regard, the government will continue to partner with companies to build stronger digital capabilities and to upskill and reskill workers to help them meet evolving demands and adapt to technological developments.

(a) SMEs Go Digital Programme and Productivity Solutions Grant. For SMEs with plans to implement new digital solutions, IMDA’s SMEs Go Digital programme continues to be available. As part of this programme, IMDA has helped to pre-approve digital solutions assessed to be market-proven, cost-effective and supported by reliable vendors to make it easy for SMEs to adopt and deploy in a timely and effective manner. We also announced during the Resilience Budget that the Productivity Solutions Grant would be raised from a maximum of 70% to 80% until 31 Dec 2020. New COVID-related solutions such as for remote working and visitor management are also supported under this grant. 

(b) Training and Development support. Training and talent development are also a key preoccupation for the industry. Therefore, I strongly encourage businesses to tap onto the TechSkills Accelerator programme to reskill their non-ICT professionals and work with them to upgrade and acquire new skills and domain knowledge that are now in demand. This will help your employees to remain competitive and play a bigger role in supporting your digitalisation efforts. 

Closing

7. COVID-19 has disrupted our economy, but it has also brought to fore many opportunities, including the acceleration of digitalisation efforts globally. I am confident that the spirit of resilience and innovation of the semiconductor industry will come through again. 

8. While the global economy will take time to recover and pick up pace, I encourage our companies to use this time to prepare for the upswing, rally together as a community to cross-share knowledge and best practices, and tap on the government support from our economic agencies. In this way, the Singapore semiconductors industry will be able to emerge stronger, together, and continue to glisten among the global semiconductors community. 

9. I wish all of you a fruitful and successful summit. Thank you.