Speech by Second Minister S Iswaran at the opening ceremony of Kulicke And Soffa’s Global Headquarters

Mr MacDonell Roehm Junior, Chairman of the Board,

Mr Bruno Guilmart, President and CEO,

Distinguished guests,

Ladies and gentlemen,

Good morning.

Introduction

1.               It gives me great pleasure to join you today in extending our heartiest congratulations to the management and staff of Kulicke & Soffa on the opening of your new global headquarters building.  I am delighted that Kulicke & Soffa has chosen Singapore to house its global headquarters, flagship manufacturing hub and second largest global R&D centre.

The rising importance of Asia

2.               Despite recent signs of slow-down in certain parts of Asia, manufacturing in Asia will likely continue to experience healthy growth, with industrial production expected to rise at rates of 4.4 to 9 per cent this year.

3.               Asia’s importance to multinational firms like Kulicke & Soffa lies not just in its production capabilities, but also in its consumer base.  The middle class in the Asia-Pacific region is expected to more than triple over the next few years, to 1.7 billion people in 2020

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.  With 54 per cent of the global middle class in 2020, this region will increasingly play a bigger role in the strategic plans of many companies.  This includes Kulicke & Soffa; I understand that, today, 80 percent of your customers are already based in Asia.

Transforming the precision engineering sector to a knowledge-based and innovation-driven one

4.               Located in the heart of Asia-Pacific, Singapore is well-positioned to capture growth opportunities in the region.  Our precision engineering sector, which comprises companies such as Kulicke & Soffa, has established a strong track record for high quality and reliability, availability of skilled talent, and an extensive network of suppliers.

5.               In recent years, we have placed special emphasis on deepening manpower and R&D capabilities within the sector.  These efforts have enabled our companies to make the transition from mass-producing lower value-added parts, to high-mix-low-volume manufacturing and technology intensive components.  Such changes have helped the sector’s value-added to grow at an annual rate of 7.3 per cent over the last five years.

6.               Today, our precision engineering sector is a leading exporter of high value-added engineering and manufacturing solutions, including advanced complex equipment such as those made by Kulicke and Soffa.  In 2012, it contributed 15 per cent, or $7.3 billion, to Singapore’s manufacturing value-add, and employed 94,000 people, of which two-thirds are locals.

Kulicke & Soffa’s growth in Singapore parallels the precision engineering sector’s transformation process

7.               In many respects, the evolution of Kulicke & Soffa’s activities in Singapore parallels the transformation of our precision engineering sector.

8.               Kulicke & Soffa started small in Singapore with a 6–person sales team in 1993.  Two decades later, Kulicke & Soffa’s has found Singapore to be a stable and trusted “Home”, where the company can undertake key activities to drive its global growth.  Besides its global production hub, Kulicke & Soffa has based an R&D team of more than 100 engineers in Singapore to drive the innovation behind new-generation products and solutions.  It has also located its top management team in Singapore to oversee critical business functions such as finance and treasury, as well as the management of supply chain, talent and intellectual property.

9.               Kulicke & Soffa’s wide scope of activities in Singapore has created a diverse range of exciting jobs for Singaporeans.  The company currently employs 570 people in Singapore and about 90 percent are skilled locals.  I am also heartened to learn that the productivity level of workers at Kulicke & Soffa is significantly higher than the industry average.  This is an important step in our desired direction to move up the value-chain and create better jobs for Singaporeans.

We must press on with the transformation process, with R&D as a key enabler

10.           Looking to the future, I hope to see more companies in our precision engineering sector transforming themselves like Kulicke & Soffa, and creating highly-productive jobs and rewarding careers for Singaporeans.  A key success factor for such companies is being positioned at the forefront of technology, and a willingness to explore emerging technologies.  The Government wants to help more precision engineering companies in Singapore ascend the value chain and, in this regard, there is scope for us to build on our partnerships with the technology leaders in our midst.  We are therefore keen to support more public-private partnerships in this area, to establish Singapore as the advanced manufacturing hub in Asia.

11.           For example, new semiconductor packaging technologies that are emerging will enable thinner and more powerful integrated circuits for next-generation mobile devices.  To strengthen such new capabilities, the Institute of Microelectronics, or IME, has established a 3D Advanced Packaging consortium with 11 industry partners, to develop 3D advanced packaging solutions.

12.           IME has also set up joint-labs with leading equipment companies, such as Applied Materials and Nikon, to develop next-generation advanced packaging solutions in Singapore.  Through such public-private partnerships, we want to encourage companies to undertake the full suite of development activities, and build deep technology capabilities in Singapore. 

13.           The Government’s efforts to support the continued transformation of our precision engineering industry are not limited to R&D.  We will also continue to invest in upgrading the skills of our workforce, including our craftsmen, and improving our productivity through automation and process innovation. 

Conclusion

14.           I would like to conclude by thanking Mr Roehm Jr., Mr Guilmart and the Kulicke & Soffa team for the enduring partnership with Singapore over the past two decades.  As we celebrate the opening of your new ‘home’ here in Singapore, I wish all of you continued success and look forward to many more years of growth together.  Thank you.

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Source:

Ernst & Young, Hitting the Sweet Spot