THE global demand for chips may have softened recently, but it is likely to rebound and continue its growth trajectory in the long term with the growth of artificial intelligence and 5G technology, said GlobalFoundries Singapore senior vice-president Tan Yew Kong.

“(The current semiconductor slump) doesn’t discourage us because we know what is important for us today is to position ourselves... so that when the market picks up, we are there to capture it with our capabilities,” said Tan, who is also general manager for the chipmaker’s Singapore site.

Tan was speaking to reporters on Tuesday (Sep 12) at the opening ceremony for its new US$4 billion fabrication plant expansion.

With the expanded 23,000 square-metre site, the manufacturer is set to create 1,000 jobs in Singapore, including new roles for equipment technicians, process technicians and engineers.

Most of these new “high-value” jobs will be filled by Singaporeans, who will benefit from picking up manufacturing, as well as research and development know-how from new technologies, said Deputy Prime Minister Lawrence Wong, who attended the launch event at the company’s existing Woodlands campus.

At full capacity, the expanded fab facility will produce an additional 450,000 of the company’s 300 millimetre (mm) wafers annually, raising GlobalFoundries’ overall capacity in Singapore to approximately 1.5 million 300 mm wafers each year.

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The manufacturer’s chips are used in cars, smartphones, wireless connectivity equipment, Internet-of-Things devices and other applications.

Some of its biggest customers include semiconductor companies such as Cirrus Logic and Qualcomm.

Singapore currently accounts for about a third of GlobalFoundries’ revenue, but this could go up to 45 per cent once the expanded facility is ramped up to full capacity, said Tan.

Amid weakened semiconductor demand, the company chose not to bring up capacity “so quickly” to avoid wastage, and is aiming to ramp up production some time in late 2025 to early 2026.

Asked about his outlook on the semiconductor industry, Tan said there was a “good chance” that the industry could recover as early as in the second half of next year, barring economic shocks or a deepening in geopolitical tensions.

He noted that some promising signs include the moderation in inflation rates as well as lowered inventories.

In his speech, Wong noted that the global landscape has changed significantly since GlobalFoundries entered Singapore in 2010.

Major countries are scrambling to control critical supply chains of chips, which has resulted in intense competition for high-end semiconductor chips.

Some of these major players have also rolled out massive subsidies to build up production capabilities closer to home.

It would be impossible for Singapore to outbid the larger countries at the level of subsidies they are offering, but the nation still has “many things going for us”, such as connectivity, reliability and stable business conditions, said Wong.

In particular, Singapore has carved out a niche in specialty chips, which are used in everyday devices.

“We can’t play in all the areas of semiconductors... but in specialty chips, I think we have competitive advantages and strengths, and we will continue to build on them,” said Wong.

GlobalFoundries is one of the largest wafer plants in Singapore, with over S$5 billion in fixed asset investments and more than 4,900 employees.

It operates two major fabrication plants in Singapore.