Singapore must ride chip upswing to grow local semiconductor industry: Alvin Tan

SINGAPORE must ride the momentum of the ongoing chip upcycle to continue growing the local semiconductor sector, said Minister of State for Trade and Industry Alvin Tan on Tuesday (July 23).

The global semicon industry was in a downcycle last year due to weak consumer demand, noted Tan. But it is poised for stronger growth this year with rising demand in end markets for consumer electronic products such as smartphones and PCs. “As our business gets back on track, there is no question that we must ride this momentum to continue growing our semiconductor industry,” he said, addressing industry players at an event by the Singapore Semiconductor Industry Association (SSIA).

Singapore’s semicon industry is starting from a position of strength, said Tan. First, the Republic is a critical node in the global chip supply chain, accounting for 5 per cent of semicon wafer fabrication capacity and 20 per cent of semicon equipment output.

Second, leading semicon companies continue to choose Singapore as an investment destination due to the country’s strong and diverse ecosystem of players and suppliers, as well as its skilled talent pool.

Third, longstanding partnerships with leading global players help to grow good and high-quality jobs for Singaporeans.

But Singapore cannot take these for granted, he said. “Competition for investments will be ever stiffer. In fact, it is already growing stiffer as countries around the world vie aggressively for strategic investments, especially in the semiconductor space.” He added: “So we must continue to maintain our edge and secure our share of the growing pie.”

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The government aims to grow the manufacturing sector by 50 per cent by 2030, as part of its Manufacturing 2030 plan.

Domestically, initiatives such as the Partnerships for Capability Transformation scheme catalyse partnerships between small and medium-sized enterprises (SMEs) and large multinationals to help smaller players grow and extend their reach globally.

Collaborative efforts also go beyond borders, said Tan. International trade missions and networking opportunities by Enterprise Singapore help SMEs to scale operations beyond Singapore.

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The government also continues to support the sector’s research and development efforts. Earlier this year, it injected a further S$3 billion to the Research, Innovation and Enterprise 2025 initiative, and launched the National Semiconductor Translation and Innovation Centre during Budget 2024.

The Semiconductor Business Connect 2024 is SSIA’s flagship event. This year’s topics include sustainability in semicon manufacturing, and opportunities for collaboration in India.