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Singapore seeks to achieve electronics rebound

Posted: 13 Sep 2002 ?? ?Print Version ?Bookmark and Share

Keywords:pc? consumer electronic? lcd? pda? photonics?

Government officials and industry leaders in Singapore said their key focus is sustaining growth for the city-state's faltering electronics industry.

Speaking at this year's Globaltronics conference, Singapore's senior minister of trade and industry, Tharman Shanmugaratnam, warned that electronics exports to the United States continued to fall along with inventory levels. "The global book-to-bill ratio for semiconductor equipment, a good indicator of growth, fell to 1.16 percent in July - its lowest level in four months, renewing questions about the prospects of recovery in consumer purchases of PCs, and other consumer electronics products," said Shanmugaratnam.

He predicted that the electronics industry will mirror conditions in the global cycle. "Production has slackened in recent months and the outlook is unclear for the next few quarters," he added.

Despite the gloomy forecasts, observers said the longer-term prospects for an industry turnaround are better. "That is why major chipmakers worldwide are still investing substantial sums to build more-efficient factories and advanced chips, despite the current uncertainties," Shanmugaratnam added.

The minister also reaffirmed that the electronics industry will remain a pillar of Singapore's economy. The city-state's fate is very much intertwined with the performance of the electronics industry, which contributes more than 50 percent of its manufacturing base. The government's strategy is to invest further in engineering training and electronics research and development. "There is every indication that the electronics industry will continue to grow rapidly for another 20 years. Hence Singapore should keep its position and stay relevant to the industry," he said.

Largest employer

Electronics manufacturing employs more than 100,000 people here, making it one of the city-state's largest employers. Measured in terms of value added per worker, the electronics industry has grown by more than a factor of 3 as compared with the overall manufacturing sector from 1990 to 2001.

Singapore is trying to boost its production of advanced LCDs for PDAs and notebooks. "It will also identify emerging areas like photonics, MEMs, smart devices, and storage devices," Shanmugaratnam said.

Deputy prime minister Lee Hsien Loong has encouraged local industry to pursue product designs. The Economic Development Board has estimated that IC design would employ 1,460 design engineers in 2005, doubling the current total. So companies like Agilent, Infineon, Microchip, Rational Software, ST Microelectronics, and Xilinx are being courted to use Singapore's R&D facilities to launch their next-generation products.

The depressed state of global electronics had little impact on fixed-asset investment in Singapore's electronics industry, which reached $3.2 billion last year - more than 60 percent of its total manufacturing investments last year.

Some of those investments are for wafer manufacturing. UMC and Advanced Micro Devices intend to open an advanced wafer plant using 65nm process technology by 2005. Seagate plans to open an automated "factory of the future" in Singapore that will serve as a prototype.

The country faces an uphill battle to remain competitive in electronics manufacturing, said Csaba Horvath, GM of Videoton Holding Rt, a Hungarian contract manufacturer. "Despite what Singapore can do, providing low-cost manufacturing solutions is important." Countries like Singapore and Hungary are losing contract manufacturing jobs to China." Horvath also noted that it is more difficult for Singapore to position as an alternative to China and other low-cost manufacturing countries like Vietnam.

Philip Koh, a semiconductor analyst with Gartner Inc., said the continued slowdown in PC orders and the downward forecast in IT spending this year will create more short-term problems for manufacturers. "There is no clear window of opportunity for semiconductor and IC designers and manufacturers. The only promising segment is the communications industry (with its) wireless communication devices and mobile telephony," said Koh.

As a result, Singapore is focusing on other areas ranging from photonics, optoelectronics and MEMs design and technology.

The Globaltronics exhibition sought to jump-start the sector by bringing together PCB makers, semiconductor equipment vendors and chipset designers.

- Tony Santiago

EE Times

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