SINGAPORE – New restrictions on China’s access to cutting-edge American technology will hit Singapore’s semiconductor industry, but measures are in train to offset the impact, said Minister of State for Trade and Industry Alvin Tan.
Mr Tan was replying to a parliamentary question raised by Mr Desmond Choo (Tampines GRC) on sweeping United States export controls announced on Oct 7 aimed at curbing the sale of advanced semiconductors and related equipment to China and to ban Americans – citizens and green card holders – from working with several Chinese chipmakers.
Mr Tan told Parliament on Thursday: “While these measures are not targeted at Singapore, our semiconductor sector could still be impacted, since semiconductor supply chains are highly complex and globalised.
“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.”
Singapore supplies 11 per cent of the world’s semiconductors, 20 per cent of chip-making equipment, and is a regional manufacturing and research and development (R&D) hub for some of the top microchip companies.
Mr Tan said Singapore and its companies cannot be completely sheltered from geopolitical tensions, but it can alleviate some of the stress on supply chains by ensuring that the country remains a stable, trusted and well-connected location for business.
He said: “We are also working with our companies to strengthen their business continuity plans and diversify their supply chains.”
The strategies laid out in the recently refreshed Industry Transformation Maps for the electronics and precision engineering sectors – such as anchoring investments from leading global companies, boosting R&D investments in emerging semiconductor technologies, and deepening the talent pipeline – can also help, he added.
“Collectively, these will enhance Singapore’s relevance in global semiconductor supply chains and strengthen our resilience against any shocks.”
Mr Tan said that at this stage, the Government does not have enough granular information to quantify the impact of the latest US curbs on Singapore’s semiconductor industry.
The electronics industry is key to Singapore’s economic growth, as it represents 40 per cent of output by the export-driven manufacturing sector.
The semiconductor segment, which is dominated by multinationals such as Micron Technology, Advanced Micro Devices, Qualcomm and Infineon Technologies, contributes more than 80 per cent of electronics manufacturing and 7 per cent of gross domestic product.
In addition, around 2,000 jobs are expected to be created by Singapore’s semiconductor industry in three to five years from 2021.
Applied Materials, the world’s top maker of chip-manufacturing equipment, cut its fourth-quarter sales forecast by US$400 million (S$570 million) last week.
The company, which has its South-east Asia headquarters and some manufacturing plants in Singapore, said the new export regulation will affect sales of its wafer-fabrication equipment and related parts to China.
Applied Materials is also the largest employer and contributor to the output of Singapore’s semiconductor equipment industry.
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MCI (P) 031/10/2021, MCI (P) 032/10/2021. Published by SPH Media Limited, Co. Regn. No. 202120748H. Copyright © 2021 SPH Media Limited. All rights reserved.