Singapore Government Press Release

Media Relations Division, Ministry of Information, Communications and the Arts,

MITA Building, 140 Hill Street, 2nd Storey, Singapore 179369

Tel: 6837-9666

His Excellency Kunihiko Makita, Japanese Ambassador to Singapore

Mr Tadashi Okamura, President and CEO of Toshiba Corporation

Mr Hidetsugu Otsuru, Managing Director of Matsushita Electric Industrial Co

Distinguished Guests

Ladies and Gentlemen

Good morning.

I am delighted to join all of you this morning for the opening ceremony of Toshiba’s and Matsushita’s Advanced Flat Panel Display’s (AFPD) LCD (liquid crystal display) plant, the first LCD production facility in Singapore. AFPD will manufacture Low Temperature Poly-Silicon Thin Film Transistor LCDs for notebooks, PC monitors and colour television applications. This S$1.8 billion facility is one of the world’s most advanced 4^th generation plants. Its opening represents a significant milestone in the development of a new manufacturing cluster in Singapore.

The investment in AFPD by electronics giants Toshiba and Matsushita shows Singapore’s strength as a high-end location for globally competitive electronics manufacturing. Manufacturing has long been an important growth engine for the Singapore economy, contributing between 21 to 26 percent of our GDP since 1991. We have only been able to hold our position in manufacturing by relentless upgrading. We are constantly moving to newer, higher value-adding activities while shedding off labour-intensive operations to other lower-cost countries. This has enabled us to stay competitive despite globalisation and the rise of China.

Recently, the ERC Sub-Committee on Manufacturing reaffirmed the sustainability and centrality of manufacturing in our economy. Its report projected that manufacturing will remain crucial to the economy, with output in 2010 rising to S$200 to S$250 billion, and still accounting for some 20 percent of our GDP then. The Sub-Committee also sees electronics continuing to play a key role and still contributing about 50 percent to total manufacturing output at that time. Of course this is only a best guess based on what we know today. What it means is that the government will continue to support manufacturing as a key engine of growth for the economy. We are studying the sub-committee’s specific recommendations carefully, and will be announcing our responses in January next year.

We keep our position by moving all the time. The electronics industry, which holds a special place in Singapore’s manufacturing sector both in the past and in the future, is a prime example of this. Electronics was one of the first industries that Singapore identified for the manufacturing sector. In 1965, a monochrome television assembly plant provided sorely needed jobs for a newly-independent Singapore suffering from high unemployment. From there, step by step, we built the foundation for more capital- and technology-intensive investments. Today, the focus is on a knowledge-driven global economy. Our objective now is to make Singapore an attractive hub for value manufacturing incorporating R&D, applications development, high value-added production, global sourcing and supply chain management.

The electronics industry leads the way in Singapore’s drive to be a world-class manufacturing hub. Today Singapore is host to 12 operational wafer fabrication plants and three state-of-the-art 12-inch fabrication plants that are under construction. The semiconductor value chain spans activities from IC design and wafer fabrication to assembly and test. Singapore manufactures about 33 percent of the world’s hard disk drives while the data storage sector has matured to include activities such as product design and highly-automated manufacturing. Despite the depressed state of global electronics last year, fixed asset investments (FAI) commitments in the electronics and precision engineering cluster in Singapore reached S$5.6 billion, amounting to over 60 percent of total manufacturing FAI commitments last year.

We have to identify and promote emerging growth technologies in the sector like micro-electromechanical systems (MEMS) and photonics. Singapore will continue to plan ahead and make the necessary adjustments in order to ensure the best operating environment for investors like Toshiba and Matsushita. We will keep investing in our hard and soft infrastructure.

Advanced displays is one of the new growth clusters identified by EDB. The global LCD market is currently worth US$35 billion. Fuelled by the increasing popularity of personal digital assistants (PDA), LCD TVs, and Internet appliances, the market is expected to grow at 17 percent over the coming years. To give a further sense of the prevalence of LCD applications, LCD monitors are expected to overtake traditional computer CRT monitors on a revenue basis in 2002, on a unit basis in 2004, and outselling them by more than five to one in 2006. Besides LCDs, Singapore is also looking to attract investments in Plasma Display Panels (PDP), Field Emission Devices (FED), and Organic Light-Emitting Devices (OLED). Advanced displays is one of the areas where Singapore can aspire to global leadership.

This sector requires skilled manpower, good infrastructure and an efficient supporting industry. Our universities and polytechnics have started display modules with the intention of training engineers with the latest display know-how. EDB will foster the growth of supporting industries in electronics chemicals, colour filters, glass panels and other areas. NH Techno, which invested in the LCD glass substrate here, began production in June 2001. Kurita from Japan views the growth potential of AFPD as significant enough to run a water treatment plant right in these premises. Nagase, too, announced in September last year its intention to invest in an electronics chemical facility in Singapore. Hitachi recently announced that it will begin production of drive chips for LCD at its wafer fabrication plant here within the next 6 months.

All these supporting activities will help make the advanced display sector globally competitive. They illustrate EDB’s enterprise ecosystem approach – nurturing the interdependence and interactivity of companies of different sizes and capabilities to create an optimal outcome, like organisms in a vibrant natural habitat.

This 35-hectare Advanced Display Park where AFPD is located shows our commitment to the sector. This ‘Advanced Display Park’ enables new companies to plug and play, with utility services like high-grade industrial water and high-voltage electricity provided on tap.

Today, we celebrate not only the opening of AFPD’s plant in Singapore, we also celebrate the birth of the new advanced display sector in Singapore. We can’t ask for better parents. Singapore has enjoyed a strong partnership with both Toshiba and Matsushita going back many decades.

Matsushita first established a refrigerator compressor factory in Singapore in 1972. Toshiba built its first television plant here in 1974. Today, both companies have multiple operations in Singapore, covering the entire value chain from corporate R&D, applications development, manufacturing to regional management. For its long-term partnership with Singapore, Toshiba received this year’s Distinguished Partner in Progress Award just last month.

On behalf of all Singaporeans, I thank Toshiba and Matsushita for your support of Singapore and look forward to a further growth in our relationship, and many more offsprings. My heartfelt congratulations on this happy day and my best wishes for your continuing success.