The chip industry contributes about 8% to Singapore’s gross domestic product and represents 10% of jobs in the manufacturing sector. — The Straits Times
SINGAPORE: New US export restrictions on semiconductors are unlikely to mar Singapore’s standing as a resilient manufacturing hub, but firms here could still take a hit from brewing trade tensions and technology competition.
Industry experts said the ever-expanding curbs could threaten the financial health of chipmakers and inadvertently endanger the fate of investments in Singapore as well.
Ang Wee Seng, executive director of the Singapore Semiconductor Industry Association, said that while various stakeholders are still assessing the full impact of the latest round of US restrictions, it is clear the measures will add complexity to the industry’s dynamics.
“For Singapore, our strength lies in a robust ecosystem, strategic location and strong government-industry collaboration, which continue to make it an attractive destination for semiconductor investments,” he said.
“These curbs underscore the importance of resilience and adaptability in the global semiconductor supply chain.”
However, Ang added: “The latest round of US export restrictions is expected to have significant ripple effects across the global semiconductor supply chain, particularly for semiconductor equipment makers.”
The US Department of Commerce imposed new restrictions on Dec 2, effective immediately, targeting China’s access to vital components for semiconductors and artificial intelligence (AI) technology.
The rules expanded existing controls on China’s ability to acquire chipmaking equipment made by US companies such as Applied Materials, KLA Corp and Lam Research.
These firms have a significant presence in Singapore, which contributes about 10% of global semiconductor supply and produces about 20% of global semiconductor equipment annually.
The chip industry contributes about 8% to Singapore’s gross domestic product and represents 10% of jobs in the manufacturing sector.
The Trade and Industry Ministry (MTI) said it is aware of the new export controls and will continue to monitor developments, including feedback from the industry.
“All companies operating in Singapore, including semiconductor companies, are required to adhere to our laws and regulations,” said an MTI spokesperson.
“They should also monitor regulations imposed by other countries, which could have implications on their commercial activities.”
Singapore serves as Applied Materials’ South-East Asia headquarters and one of the largest advanced manufacturing bases outside the United States. The firm also has two research and development centres here.
The company said the updated export regulations will likely not have an immediate impact on its financial health.
“Applied Materials is not changing the guided ranges of our first quarter of financial 2025 business outlook provided (on Nov 14),” it said.
KLA opened the first phase of its fourth plant in Singapore in October, part of a US$200mil (S$268mil) plan to expand its presence here.
The company said the new export restrictions further restrict its ability to provide certain semiconductor capital equipment products and services to China-based customers, adding that the “rules are complex, and we are still reviewing their application to our products and services”.
KLA noted that preliminary reviews of potential business implications showed no immediate impact on its guidance for the quarter ending Dec 31, 2024.
The new rules also blacklisted 140 additional Chinese entities, with a focus on companies that produce chip manufacturing equipment that is crucial to China’s pursuit of advanced semiconductor manufacturing.
Beyond specific company sanctions, the controls unveiled on Dec 2 impose restrictions on the sale to China of two dozen types of manufacturing equipment and three software tools, including gear that is manufactured overseas in places such as Singapore. — The Straits Times/ANN
