Singapore’s semiconductor investment up, sector's outlook brighten

Semiconductors make up 85% of computer-related FDIs.

With computer-related investments more than doubling in Singapore since 2017, DBS said its semiconductor sector is facing a brighter outlook ahead as it continues to attract chip producers despite limited land and water resources.

DBS in a note dated 5 Feb said actual and committed foreign direct investments (FDI) to the city-state’s computer-related manufacturing industry more than doubled from 2017 to 2021, with semiconductors making up more than 85% of the total.

Singapore also ranked the third biggest exporter of integrated circuits fabricated on semiconductor chips to date, although the research group expects chip-related investments in this segment to wane, citing the huge capital needed for the fabs coupled with the country’s limited land and water resources.

Investors and manufacturers, however, appear to be more optimistic about Singapore's advanced manufacturing as the Southeast Asian nation already features a world-class logistics base and a huge network of suppliers and partners.

“Global manufacturing giants continue to find Singapore an attractive location for advanced manufacturing… There is an exceptionally wide spectrum of semiconductors and adjacent products that are at the heart of global tech hardware ecosystem for which Singapore remains a fertile ground,” DBS said.

It expects Singapore’s semiconductor footprint to grow further as these investments materialise. It said data from 2022 to 2023 should also reveal stronger figures with several global manufacturers already setting up shop in the country.

Last September, US chipmaker GlobalFoundries launched a $4b manufacturing plant in Singapore, while Vanguard International Semiconductor, a unit of Taiwan’s TSMC, unveiled plans to build a highly sophisticated manufacturing facility.