Overview
Driven by Singapore’s Electronics Industry Transformation Map, industry a significant contributor to country’s GDP
The prominence of Singapore’s electronics manufacturing industry dates back to the 1960s, when it was the only TV assembly plant in Southeast Asia. The Singaporean government has focused on the growth of the electronics industry, as it is a key driver of manufacturing growth for the country.
Singapore launched its Electronics Industry Transformation Map (ITM) in 2017, with a target of increasing the industry’s manufacturing value-add by SGD 22 billion by 2020, when output was at SGD 90 billion in 2016. Since then, the electronics industry has grown to become a key contributor to the economy, accounting for 8% of Singapore’s GDP in 2020, with SGD 139 billion worth of manufacturing value-add.
The industry had around 372 entities, employing around 80,000 employees in 2020, accounting for 22% of the manufacturing workforce. The electronics industry forms part of the manufacturing sector and accounted for 41% of Singapore’s manufacturing output in 2021. The industry includes Semiconductors, Computer Peripherals & Data Storage, Infocomms & Consumer Electronics and Other Electronic Modules & Components as its sub-segments.
Singapore a global hub for semiconductor manufacturing and key player in global supply chain for storage and memory products
Semiconductor manufacturing is the largest sub-segment within the electronics industry, which accounted for 36% of the manufacturing output in 4Q 2021 where the total electronic cluster accounted for 44% of the total manufacturing output for the quarter. Singapore has around 12 semiconductor assembly and test operations that include global leaders such as NVIDIA, Infineon and Micron. The country is also home to some of the world's largest pure-play foundries.
In addition to semiconductor manufacturing and assembly, Singapore is also a key hub in the global supply chain for storage & memory products and microelectromechanical systems (MEMS), with leading materials & equipment and electronics manufacturing facilities. Singapore held around a 19% share of the global semiconductor equipment market in 2021 and 40% of the world's hard disk market share. Around 1 out of 10 wafer starts are manufactured in Singapore.
Key Trends
Electronics industry thrives amidst pandemic, supported by manufacturing disruptions in China
While many industries were severely affected by the pandemic, Singapore’s electronics manufacturing industry has been thriving, driving the overall growth of the manufacturing sector. The semiconductor sub-segment was the main growth driver for electronics, as semiconductor demand grew robustly due to the closure of Chinese manufacturers, and was further supported by the growing demand from the 5G and automotive markets.
On the supply side, semiconductor manufacturing was declared an essential service by the Singaporean government, to ensure that movement restrictions did not affect production, which contributed to the growth of the electronics manufacturing industry, amidst the pandemic.
All sub-segments grow by double digits in the electronics industry as a result of robust demand from 5G and automotive markets
The electronics industry grew by 15% YoY in 2021, from SGD 139 billion in 2020, driven by robust demand for semiconductors on the back of 5G growth. All industry sub-segments saw double-digit YoY growth in 4Q 2021, with infocomms & consumer electronics, other electronic modules & components, computer peripherals & data storage and semiconductors segments growing by 27%, 12%, 11% and 2% YoY respectively for the quarter. Electronics exports grew by 16% YoY in 2021, and were the main driver of non-oil domestic exports for the year.
The industry also attracted the largest investment in fixed assets in 2021, recording SGD 5 billion and accounting for 42% of total fixed asset investments received in Singapore.
GlobalFoundries, the US-based semiconductor manufacturer holding around one-third of global semiconductor market share, announced plans to build a new production site in Singapore in 2021. The company already manufactures 40% of its semiconductors in Singapore and now aims to commit around USD 4 billion to expand production. The facility is scheduled to begin production in 2023, and will mainly serve the automotive, 5G mobility and secure device industries.
Singapore aims to develop Industry 4.0 capabilities through R&D in the electronics industry, while the US and Europe attempt to reduce reliance on outsourcing
The pandemic-induced global chip shortage, where demand from US and EU automakers outpaced supply as of January 2021, has created greater opportunities for Singapore’s electronics industry. While the US and Europe are determined to reduce reliance on the outsourced manufacturing of semiconductors, Singapore remains a key hub in the Asian region, where over 90% of the world’s most advanced chips are produced, mainly in countries such as Taiwan, South Korea and Japan.
Singapore’s three-staged ‘Manufacturing 2030’ plan includes developing capabilities of local enterprises in advanced manufacturing, by collaborating with leading manufacturing companies through the Global Innovation Alliance. Key players in the electronic industry such as Konica Minolta and MediaTek Inc. have already established innovation centres in Singapore as part of the country’s Industry 4.0 programs.
Singapore has also launched the Smart Industry Readiness Index, which is an assessment tool to develop the country’s smart capabilities. Companies in the electronics industry, such as United Microelectronics Corporation, have adopted the Smart Industry Readiness Index toolkit as part of their Industry 4.0 transformation.
It is notable that Singapore was also ranked among the leading countries in the World Digital Competitiveness Ranking 2020, ranking first in its ability to develop technologies, and second in understanding and building new technologies, in addition to ranking 12th in future-readiness. The World Economic Forum has named two semiconductor manufacturers, Infineon Singapore and Micron Singapore, as two of the 54 Lighthouse factories in the world for adopting Industry 4.0 technologies.
Singapore trains over 13,000 engineers and technicians per year, through various platforms such as the Singapore Industry Scholarship (SgIS), Industrial Postgraduate Programme (IPP) and the Economic Development Board’s EDB-NVIDIA Future Talents Program, to develop the talent pool of the electronics industry, and generate the next generation of foundry engineers, IC designers and AI talent.
As part of the industry’s transformation strategy, Singapore is developing its R&D capabilities in Microelectronics. Singapore’s specialisation in MEMS has drawn leaders in the electronic space to the country. In 2020, STMicroelectronics (ST), in partnership with the Agency for Science, Technology and Research (A*STAR) and ULVAC Inc., opened the world’s first ‘Lab-in-Fab’ production facility (R&D line) in Singapore, which produces Piezo MEMS used in smart glasses, healthcare apparatus and 3D printing markets.
Singapore’s Research, Innovation and Enterprise 2025 Plan aims to build R&D capabilities through partnerships. Singapore has launched the new Singapore Hybrid-Integrated Next-Generation μ-Electronics Centre (SHINE), in partnership with local industry players and DSO National Laboratories, to advance the adoption of new technologies and solutions in materials engineering, soft sensors and energy management, across the microelectronics supply chain.
The Institute of Microelectronics (IME) at A*STAR and Soitec (a semiconductor producer) announced the development of next-generation silicon carbide (SiC) semiconductor devices in January 2022, which will be used in electric vehicles and advanced high-voltage electronic products. Soitec has announced plans for expansion, increasing its team size by around 60% by 2026.
Key Statistics
- More than one-tenth of the world's semiconductor chips, powering phones around the world, are manufactured in Singapore
- Singapore accounted for about 5% of global wafer fabrication capacity in 2021
- Singaporean companies paid around SGD 6 billion in remuneration in 2020, for the 80,000-strong workforce in the electronics industry
- The monthly export of electronics in Singapore peaked at an all-time high since 1999 in December 2021, reaching SGD 16 billion
- The monthly average of electronic exports during the period from 1999 to 2021 was SGD 8 billion
