Manufacturing Technologies in Singapore

A Hot Tip about Major Industries in Singapore

Posted on: 18 Feb 2010


As the regional powerhouse for advanced manufacturing technologies, Singapore provides an excellent opportunity for U.S. manufacturing companies to enter the ASEAN region. Manufacturing represents a significant component of Singapore’s GDP -- 21% according to Singapore’s Economic Development Board (EDB) -- and is highly valued and supported by the Singapore Government. Semiconductors, Nanotechnology, MEMS and solar technologies will all be critical components of Singapore’s long-term economic growth. The local press estimates that Singapore’s robust semiconductor industry accounts for 11% of the world’s computer chips. Nanotechnology is a growing field that will have a commercial sales potential of US$1 trillion by 2010. Likewise precision engineering and renewable energy, specifically solar technologies, are gaining considerable traction in the Republic. Both sectors receive significant support from the government and the private sector.


Singapore Government statistics indicated the GDP as US$176.8 billion in 2008. The manufacturing sector contributed US$34.5 billion to the aggregate GDP. This represents just fewer than 20 percent of Singapore’s GDP vs. 25 percent in 2006 and 23 percent in 2007 respectively. The decrease in the relative proportion of the manufacturing sector can be attributed to the recent global economic crisis which, according to the latest statistics, has seen manufacturing output decline by an annualized -12.8 percent. Despite the economic crisis, the Singapore Government is committed to consistently adding jobs and output to the manufacturing sector and is actively searching to bring U.S. companies to Singapore to look for joint-venture partners, agents/distributors, or buy and sell products locally and regionally.


Now is an opportune time for U.S. companies to strengthen their ties with Singapore. Numerous R&D grants are available for foreign firms to support technology developments. Singapore’s position as the premiere regional trading hub, its ideal location, and its highly skilled, English proficient workforce are ideal catalysts for U.S. companies to test and implement new technologies prior to further expansion within the ASEAN region. Singapore’s nanotechnology, MEMS, and solar technology sectors are young but rapidly growing. U.S. companies must act swiftly to develop partnerships and establish their market presence in these growing sectors to ensure a sustainable and profitable market presence in the future.


Market Demand/Overview


General and Semiconductor:

General and Semiconductor: Once the low-mix, high volume manufacturing hub for Southeast Asia, Singapore has been quickly ascending the manufacturing value chain. A combination of concentrated government investments in education and infrastructure, as well as tax incentives, are significant factors in drawing researchers and manufacturing operations to the island. There are currently over 7,000 MNCs with operations in Singapore of which 1,500 are from the United States. By the end of 2007, U.S. based MNCs had investments of US$82 billion in Singapore and Singapore represented the third largest U.S. FDI recipient in Asia. Furthermore, 2008 U.S. manufacturing exports to Singapore clocked in at US$28.8 billion— making Singapore the 12th largest market in the world for U.S. manufactured goods.


Singapore’s focus on high-end manufacturing processes, specifically semiconductors, is conducive to attracting both suppliers and buyers. A recent Straits Times article revealed that Singapore has approximately 60 semiconductor companies that employ over 40,000 people and collectively produce 11 percent of the world’s computer chips. The sector alone accounted for slightly more than three percent of Singapore’s GDP.


The Semiconductor Industry Association expects a 21 percent drop worldwide in semiconductor chip sales in 2009 to less than US$200 billion. However, with the easing of the economic crisis, chip sales in 2010 are expected to grow at a rate of more than six percent. Singapore, an important player in the manufacture and design of semiconductors, will play a critical role in the global resurgence. Prior to the global financial crisis, Singapore’s manufacturing sector was growing at nearly eight percent per annum. While the financial crisis has caused a contraction in the growth rate, the sector is expected to rebound with vigor as the crisis continues to ease.


Nanotechnology and Precision Engineering:

Nanotechnology and Precision Engineering are two sectors of growing in importance in Singapore. Nanotechnology is a small, but increasingly significant, sector in both the global and Singaporean economy. Indeed, a recent local newspaper article asserted that the commercial potential of nanotechnology in 2010 will reach at least US$1.0 trillion. Within precision engineering, local sources indicated that the sector accounted for approximately 10 percent or US$15.3 billion of Singapore’s total manufacturing output and employed over 100,000 workers in 2008. Continued growth and expansion is expected within the precision engineering sector as Singapore moves away from low-mix, high volume to high-mix, low volume manufacturing.


Mechatronics is a relatively small industry in Singapore, yet the critical role it plays in supporting the precision engineering and semiconductor industries should not be underestimated. The Mechatronics Group, part of the Singapore Institute of Manufacturing Technology, is committed to fostering various forms of collaboration among researchers and companies to aid in precision motion, electromechanical modules and robotics.


Solar Technologies:

Singapore is also attempting to transform itself into the global hub for clean energy, specifically the research and development of photovoltaic cells. Due to the island’s location along the Southeast Asian Sunbelt, experts believe Singapore is well positioned to take advantage of solar energy. The government has established several research partnerships to develop, refine, and eventually manufacture photovoltaic cells. These actions have begun to foster a dynamic solar environment which has already attracted numerous European firms and should also prove quite conducive to U.S. investments.




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Posted: 18 February 2010

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