Media Division, Ministry of Information and The Arts, 36th Storey, PSA Building, 460 Alexandra Road, Singapore 119963. Tel: 3757794/5
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SPEECH BY MR LEE YOCK SUAN, MINISTER FOR TRADE & INDUSTRY AND 2ND MINISTER FOR FINANCE,
MR LEE YOCK SUAN,
AT THE JOINT VENTURE ANNOUNCEMENT CEREMONY OF CHARTERED SILICON PARTNERS PTE LTD, ON 3 APRIL 1997 AT 9.30AM
As Singapore's cost and capabilities profile shifts towards that of the developed countries, low value-added, assembly-type operations will become less and less competitive in Singapore. We have to constantly seed the growth of new high value-added, skills-intensive industries in Singapore that will provide the higher returns for our skilled but limited manpower, and our investment in infrastructure and R&D support.
We have identified wafer fabrication as one such strategic industry.
With the semiconductor boom in 1995, we moved quickly and mobilised the expertise of several agencies to catch the wave of investments in wafer fabs.
EDB spearheaded the investment promotion and together with the universities and polytechnics, developed specialised manpower training programmes; JTC prepared the land and infrastructure for wafer fab parks in Tampines and Woodlands; and NSTB leveraged on the technological expertise that had been built up in our research institutes, to support the wafer fab industry.
I am happy to note that good progress has been achieved. We have successfully encouraged existing wafer fabrication companies to expand their operations, and secured significant investments from new companies such as Chartered Silicon Partners and the Hitachi-Nippon Steel Joint Venture.
Just over a year ago, Singapore had only 4 wafer fab plants. Today, we have 10 plants that are either already in operation or under development.
Semiconductor Industry
Although sentiments about the semiconductor industry are less bullish today in view of the current electronics slowdown, we believe the fundamentals of the industry are strong, and would continue to welcome investments in the wafer fab industry. With a growing base of wafer fabrication companies and a strong local supporting industry comprising precision tooling, equipment and specialty materials, Singapore is poised to tap into an anticipated recovery in the global electronics industry.
Preliminary indications are that the electronics slowdown is bottoming out and should pick up towards the latter part of 1997. One widely watched indicator, the US semiconductor book-to-bill ratio, has exceeded parity since October last year.
While we already have a critical mass of wafer fab plants here, I am hopeful that the more positive outlook for 1997 will give impetus to further growth. Singapore can potentially support more than double the current number of wafer fab plants.
Chartered Silicon Partners
It therefore gives me great pleasure to join you for the announcement of the joint-venture wafer fabrication project between Chartered Semiconductor Manufacturing (CSM), Hewlett-Packard and EDB Investments, to form Chartered Silicon Partners Pte Ltd. CSM is our local semiconductor foundry which together with sister companies Tritech and STATS, provide integrated ASIC design and manufacturing capabilities. Hewlett Packard needs no introduction. Chartered Silicon Partners is HP's second wafer fabrication joint venture as it is also one of the 4 partners in TECH Semiconductor.
This is a significant project for several reasons.
- First, it is a strategic alliance between a local company and a leading MNC.
I welcome more of such win-win partnerships whether they are for investments in Singapore, or are joint investments into the region.
- Second, HP's continued investment and partnership with CSM signals its continued commitment to Singapore and its confidence in the fundamentals of the semiconductor industry.
- Finally, this project will add to our growing base of wafer fab plants.
Cluster Development Fund
EDB Investments also holds a small stake in Chartered Silicon Partners to cement the partnership between CSM and HP. The investment is made under the Cluster Development Fund, or CDF. The CDF was set up in 1994 with an initial injection of $1 billion and is managed by EDB Investments.
The objectives of the CDF are :
a. Firstly to co-share risks with industry, as a demonstration of Government's commitment and to show that we are in it for the long haul;
b. Secondly to foster strategic alliances and secure strategic investment projects;
c. Thirdly, to accelerate the development of Promising Local Enterprises; and
d. Fourthly to extend Singapore's partnership with key MNCs into the region where these result in spin-offs to the Singapore economy.
To date, $500 million of CDF have been invested in 15 projects.
These include strategic projects in the wafer fabrication and petrochemical industries and investments in a few Promising Local Enterprises.
The pipeline of good projects is strong. I am therefore pleased to announce that the Government will inject an additional $1 billion into the Cluster Development Fund. This will increase the Fund size to $2 billion. Ample funds will be made available to co-share risks in strategic projects with industry.
Chartered Silicon Partners is one such important project. As our stable of Promising Local Enterprises grows and matures over next 5 to 10 years, I hope to see more of such strategic alliances with leading MNCs.
On this note, I congratulate CSM, HP and EDB on the announcement of their new partnership and wish Chartered Silicon Partners every success in the years ahead.
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