Singapore semiconductor sector may be hit by US export controls on China: MTI
WHILE recent US export controls are aimed at restricting China’s access to semiconductor technologies, Singapore’s semiconductor sector could still be impacted due to highly complex and globalised supply chains, said Minister of State for Trade and Industry Alvin Tan in Parliament on Thursday (Oct 20).
“Many semiconductor companies operating in Singapore have manufacturing processes and products that rely on US technology, which may be subject to export controls imposed by the US government,” Tan said in his response to a question by People’s Action Party Member of Parliament Desmond Choo (Tampines GRC).
Addressing a supplementary question from Choo, Tan said that “we do not have granular information at this stage” on how much of Singapore’s semiconductor industry is affected by the new regulations, and “it is equally possible that the US could be contemplating additional steps that may further reshape or affect technology supply chains”. He added that the ministry is carefully monitoring the situation.
The US export measures announced by the Biden administration on Oct 7 effectively prevent top US toolmakers from selling their advanced semiconductor chips with wide artificial intelligence and supercomputing applications to Chinese companies.
To mitigate the impact on Singapore and enhance the country’s relevance and resilience in semiconductor supply chains, the ministry is working with companies to strengthen their business continuity plans and diversify their supply chains.
It will also work on “anchoring investments from leading global companies, doubling down on R&D (research and development) investments in emerging semiconductor technologies, and also deepening our talent pipeline” – strategies set out in the recently refreshed electronics and precision engineering Industry Transformation Maps, Tan said. “It’s not just the semiconductor companies, but the ecosystem that we are allowing and attracting to be based here in Singapore... effectively making sure that we diversify as much as possible to prevent us from being affected by future shocks that will inevitably arise.”
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The electronics sector is the largest contributor to Singapore’s manufacturing output. In turn, semiconductor manufacturing contributes more than 80 per cent of Singapore’s electronics manufacturing output and 7 per cent of gross domestic product.
According to the Economic Development Board, the government is looking to develop more semiconductor research, engineering and design talent, with the aim of training 1,000 PhDs over the next 10 years.
International semiconductor companies have also announced plans to expand their Singapore operations.
Major investments from French wafer manufacturer Soitec – which told The Business Times that it will invest 400 million euros (S$557 million) to double the size of its Pasir Ris factory and double its headcount – and Taiwanese semiconductor firm United Microelectronics – which said in February that it will invest US$5 billion in a new factory in Singapore – join commitments from other big names such as GlobalFoundries, Infineon, Siltronic and Micron in recent years.
Several Singapore-listed companies in the semiconductor industry have seen falls in share prices since the US curbs were announced.
Shares of AEM Holdings closed at S$3.10 on Thursday, down S$1.04 or 25.1 per cent from Oct 7. Frencken Group’s shares ended at S$0.79, down S$0.185 or 19 per cent. UMS Holdings saw its share price fall S$0.38 or 29.7 per cent from Oct 7. Elsewhere, Valuetronics shares closed at S$0.475 on Thursday, down S$0.055 or 10.4 per cent from Oct 7.
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