Speech by MOS Alvin Tan at SSIA Semiconductor Business Connect 2024

His Excellency, Ambassador of Costa Rica, Mr Victor Hugo

Ms Jennifer Teong, Chairman, Singapore Semiconductor Industry Association (SSIA)

Mr Ang Wee Seng, Executive Director, SSIA

Introduction

1. The SSIA and I have worked very closely over the years. Earlier this morning, I was reminded that in 2021, we had the inaugural SSIA Semiconductor Business Connect. It was virtual, and at the height of the pandemic. Today, with the fourth edition of the SSIA Semiconductor Business Connect, it is good to see so many familiar faces and friends amongst us.

2. Last year, SSIA celebrated 55 years of Singapore's semiconductor industry. It was amidst an industry downcycle due to weak consumer demand. There appears to be a bit of a silver-lining and better news this year, because we are poised for stronger growth in semiconductors with rising demand in end markets, such as our smartphones, PC and AI.

3. So as our business gets back on track, there is no question that we must ride this momentum to continue growing our semiconductor industry. SSIA plays a crucial role in this effort.

Overview of Singapore's Semiconductor Industry Landscape

4. Today, our semiconductor industry is starting from a position of strength. First, we have become a critical node in the world semiconductor supply chain. We account for 5% of semiconductor wafer fab capacity and 20% of semiconductor equipment output.

5. It is really encouraging to know that leading semiconductor companies continue to choose Singapore as their investment destination. Siltronic, for example, recently opened its third production plant, and I had the honour of opening Pall'smicroelectronics filter manufacturing facility a couple of weeks ago.

6. We have a strong and diverse ecosystem of players and suppliers. We have an increasingly strong skilled talent pool, thanks to collaboration with industry and Institutes of Higher Learning (IHLs). We also have a conducive business environment, particularly important in a very fragmented world, which is likely to get even more fragmented. Our long-standing partnerships with leading global players many of you represent here, helped us to grow and create good and high quality jobs for our people.

7. But as always, we cannot take this for granted because competition for investments will be ever stiffer.In fact, it's already growing stiffer as countries around the world vie aggressively for strategic investments, especially in the semiconductor space.So we must continue to maintain our edge and secure our share of a growing pie.

Empowering Semiconductor SMEs to Strengthen the Local Semiconductor Ecosystem

8. To remain an attractive location and destination for semiconductor investments, we must continue to strengthen this very precious ecosystem which all of you are part of. That is Singapore's key competitive advantage. That is why our plan for Manufacturing 2030, which is to grow our manufacturing sector by 50% by 2030, is important. This of course, includes our electronics sector, with the semiconductor industry as the backbone of this strategy.

9. We must continue to attract the best, both global as well as local companies. For many of you, we must grow our local companies in advanced manufacturing, and then work with our IHLs - polytechnics, universities, and Institute of Technical Education - to make engineering and manufacturing attractive to our growing pool of students. This is why the SSIA Semiconductor Business Connect is important, because of what Wee Seng, Jennifer and the team are doing - building stronger links between firms across the industry.

10. This also, importantly means empowering our small and medium enterprises or SMEs to both "collaborate and innovate", which is incidentally this year's theme.We are collaborating with both global and local players in our semiconductor ecosystem, with both big and small companies working to strengthen our global competitiveness, as well as our resilience because the next crisis can come anytime.

11. We are already seeing how these initiatives are making an impact.

a. ELH Tech is a local SME specialising in Additive Manufacturing. ELH Tech serves multiple industries including the semiconductor sector, and has successfully engaged over 5 MNCs with the support of Enterprise Singapore. These collaborations have helped ELH Tech innovate and achieve promising results in 3D part evaluation and testing.

12. Many of you know that in this year's Budget, the Ministry of Trade and Industry announced enhancements to the Partnerships for Capability Transformation (PACT) scheme. PACT effectively catalyses this partnership and innovation between MNCs and our local companies, helping our SMEs grow and extend their reach globally.

13. Our collaborative efforts also go beyond borders. SSIA, together with EnterpriseSG, helps our SMEs access global markets. They do this through international trade missions, networking opportunities, and market intelligence. In fact, I was in West Africa, Ghana, last week, with an EnterpriseSG team, bringing 22 Singapore businesses to invest and explore business opportunities in Ghana. EnterpriseSG has offices across the world. Both EnterpiseSG and the Economic Development Board, as twin engines for MTI, facilitate this.

14. By working with external Governments in markets such as Costa Rica and India, our SMEs can and must in fact, scale and internationalise operations beyond Singapore. Many of the representatives are here today, such as Ambassador Hugo, and many others. Thank you for your partnership and confidence in Singapore.

Driving Innovation to Stay Competitive

15. Besides collaboration, the other part of the equation is also innovation. Many of you are already masters of innovation. It is these cutting-edge innovations which put us at the forefront of the industry. Innovation also depends on R&D. The private sector is already at the forefront of R&D, continually innovating and inventing for market and going to market.

16. The government provides a lot of support for R&D. We recently injected another $3 billion to our Research, Innovation and Enterprise 2025 and launched the National Semiconductor Translation and Innovation Centre. This centre supports companies with your R&D efforts. It will help our companies create new products with a shorter time to market and commercialise quickly.

17. Innovation is key, particularly in emerging areas such as AI and already emerged areas such as additive manufacturing. Industry leaders who are representative here, such as GlobalFoundries, STMicroelectronics, are already using AI for predictive maintenance to substantially reduce production tool downtime.

18. The use of additive manufacturing has also streamlined lead times for critical parts, saving many of our companies both time and money. We must not rest on our laurels, and keep researching, developing our capabilities and push the boundaries to reach the next frontier of innovation. If you have not already used AI, do not fret, because we are setting up an AI Centre of Excellence for the Manufacturing Sector. This Centre of Excellence will help develop AI-enabled solutions that can be applied to your company and across sector. We plan to launch this Centre by the end of this year, and I hope in time, the Centre will help many of you and many of the companies present here use AI more effectively as it grows exponentially.

Closing

19. In closing, many of you already know semiconductors are in every single aspect of our lives. They are found in our phones, our digital cameras, our cars and the MRTs that brought us here this morning. They connect and control the electric currents within our devices, and without them, many of us would live in a very different world.

20. In the same way that semiconductors connect circuits, we must also keep our industry well connected and we will continue to work with our partners, like SSIA, to work with our future that is charged with innovation, sustained growth and endless possibilities.

21. Thank you to Jennifer, Wee Seng and the SSIA team, for conducting this event and exceeding your expectations. I wish all of you a fruitful time of networking, and also coming up with new ideas that we can all together, both Singapore and industry, go to market.

22. I wish you all a fruitful conference. Thank you for having me here in your fourth edition. Thank you very much.

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