The many valuable returns of R&D investments

LOCAL industrial output has been tepid for some quarters, reflecting weak external demand. Just about the sole bright spark comes from the electronics sector, which has managed a near-9 per cent growth in the first eight months of 2016, propped up by the semiconductor industry. The local semiconductor industry is a fine example of public research-and-development (R&D) investment paying off in multiple ways for society and the economy.

In the early days, Singapore attracted foreign players in the electronics industry by offering incentives and cheap labour. We were mere recipients of foreign direct investment (FDI), because we did not have an active R&D ecosystem then. But over time, through strategic investments in science and engineering, we have evolved to become active participants and partners within a developed research ecosystem. This has allowed us to attract some of the best semiconductor companies here.

A case in point: US-based Applied Materials, one of the world's largest semiconductor manufacturing equipment and solutions companies, announced on Sept 19 that it is extending its research collaboration with the Institute of Microelectronics (IME) by five years. IME is a research institute led by the Agency for Science, Technology and Research (A*STAR). The combined investment of this partnership is expected to reach around S$190 million, and will expand the R&D scope of fan-out wafer-level packaging which has the potential to make chips and devices more compact, and operate more efficiently.