Despite trade issues, Singapore should prioritize semiconductor prospects

[SINGAPORE] Singapore and its ASEAN neighbors must remain steadfast in advancing their semiconductor strategies, as chipmakers are set to continue investing globally and innovating, irrespective of trade barriers, according to Mr. Ajit Manocha, president and CEO of global industry association Semi.

Mr. Manocha highlighted that for an industry as globally interconnected and interdependent as semiconductors, ongoing trade tensions and policy uncertainties create a highly challenging operating environment. However, the ever-increasing demand for technology and semiconductors — which power everything from smartphones to autonomous vehicles — means that chipmakers will look past current disruptions to capitalize on new opportunities.

Semiconductors are the cornerstone of modern technology, driving innovations across various sectors, from smartphones and computers to advanced medical devices and autonomous cars. The growth of the semiconductor industry is not just an economic imperative, but a strategic necessity for countries striving to maintain technological sovereignty and security.

"This is a time of unprecedented challenges and uncertainties, but it is also a time of unprecedented opportunities," Mr. Manocha said in an interview with The Straits Times ahead of the Semicon South-east Asia 2025 conference in Singapore this week.

He further emphasized that Singapore should clearly outline its semiconductor strategy and lead the way for other ASEAN nations to follow suit.

Mr. Manocha noted that 105 new chip fabrication plants, or fabs, have been announced globally, with 84 of them already under construction. The rise of these fabs reflects the industry's resilience and its forward-looking perspective. Despite geopolitical tensions, companies are making significant investments, driven by the anticipated increase in demand for advanced semiconductors, particularly due to emerging technologies like artificial intelligence, 5G networks, and the Internet of Things, all of which require high-performance chips.

Six of these under-construction fabs are located in Southeast Asia, half of them in Singapore, he said. "With global chip sales projected to reach US$1 trillion (S$1.3 trillion) by the early 2030s, the industry will need an additional 30 fabs by 2030," Mr. Manocha stated.

This presents an opportunity for ASEAN and Singapore, which are already integral to the global chip supply chain. Mr. Manocha pointed out that many nations are now vying to attract semiconductor investments. Singapore's strategic location, advanced infrastructure, and skilled workforce make it an attractive destination for semiconductor companies. The government's proactive support, through incentives, research funding, and talent development programs, further solidifies Singapore’s position.

"Singapore should play an even larger role in attracting investments, given it already has the largest semiconductor ecosystem in ASEAN," he added.

Singapore is a critical node in the global semiconductor supply chain, contributing one in ten chips and one in five semiconductor equipment produced annually, according to the Economic Development Board. The semiconductor industry in Singapore spans research, development, and manufacturing, contributing over 8% to the country’s GDP.

Other ASEAN countries, including Malaysia, Thailand, the Philippines, and Vietnam, also play vital roles in the global chip value chain.

The industry is facing uncertainty due to intensifying technological competition between the U.S. and China, the world's two largest economies. U.S. President Donald Trump had previously threatened to impose global sectoral tariffs on semiconductor imports, further complicating the geopolitical landscape. This has led to a reevaluation of supply chains, with many companies exploring diversified manufacturing bases to mitigate risks. This shift provides new opportunities for ASEAN countries to position themselves as alternative semiconductor hubs.

Mr. Manocha, who has worked with companies such as GlobalFoundries, Philips Semiconductors, and Spansion, noted that while the economic environment is currently disruptive, the chip industry has weathered many cycles of boom and bust. "I've been in this industry for over four decades, and I've witnessed its earlier cycles, with extreme ups and downs. Despite those challenges, many of us have survived and learned to navigate through volatility."

He believes that the current global trade turbulence may persist for another six months before stabilizing. "Semiconductor investments are long-term commitments. I haven’t heard of anyone halting their plans for new fabs. While some may slow down for various reasons, the long-term prospects of the industry remain strong."

One of the more persistent challenges facing the industry is its ongoing search for talent and its growing demand for energy, preferably from sustainable sources. Mr. Manocha emphasized that governments play a crucial role in developing talent and ensuring the availability of sustainable energy to power semiconductor plants.

"The role of governments is becoming even more critical, especially given the other challenges we face, such as talent shortages, energy crises, and regulatory issues with chemicals," he said.

Mr. Manocha commended Singapore for its initiatives aimed at developing the next generation of talent, such as the Semiconductor Active Youth Ambassador Programme (SAY), initiated by the Singapore Semiconductor Industry Association. This industry-led program, in partnership with local polytechnics and universities, provides students with valuable hands-on experience and mentorship opportunities in the electronics sector.

Semi also runs the Semi International Policy Summit (Sips), where global semiconductor industry leaders collaborate with policymakers to shape semiconductor policy. Sips working groups focus on issues like narrowing the talent gap, sustainability efforts, and ensuring safe operations.

Mr. Manocha praised Singapore’s active involvement in promoting Sips initiatives, noting that the next Sips meeting will be held in Singapore on December 11-12, 2025.

"Governments have an important role in inspiring the younger generation to pursue STEM (science, technology, engineering, and mathematics) education, as it helps develop the advanced technologies that will be transformative," he concluded.