In Focus | Southeast Asia
Singapore’s Semiconductor Resiliency Tempers Pandemic Impact

ingapore prides itself with the most established semiconductor industry in Asia with its breadth of value chains, from research and development (R&D), design, manufacturing, and distribution. The country’s bout with the novel coronavirus (COVID-19) pandemic has barely made a dent to manufacturing output growth, registering a decline of only 0.7 percent in the 2Q of 2020 compared to a year ago. This decline is caused primarily by the Circuit Breaker program implemented by the government to minimize the impact of pandemic. However, it can be noted that electronics output grew 5.6 percent during the same period.

The semiconductor industry is a key component of Singapore’s manufacturing output. From Jan. to June 2020, it posted an output growth of 1.7 percent over a year ago with June output registering 26 percent. This double-digit growth was driven primarily by cloud services, data centers and 5G markets.

Wee Seng Headshot
Ang Wee Seng, Executive Director of the Singapore Semiconductor Industry Association (SSIA)
The resiliency of Singapore’s semiconductor industry has shielded it from the worst possible impact of the pandemic. In an interview with Asia Electronics Industry, Ang Wee Seng, Executive Director of the Singapore Semiconductor Industry Association (SSIA), said, “(The) semiconductor industry is fortunate to see lesser impact from the pandemic when compared to other industries. Demand for semiconductor continues to be strong in the first half of the year, and is forecast to continue to be strong for the year. The demand for consumer products (work-from-home devices), servers, and the upcoming 5G technology are just some of the drivers for semiconductor needs,” said Wee Seng.

However, COVID-19 had left major impact on the industry in terms of shortage of workers due to travel restrictions, supply chain disruptions, and logistics and freight, according to Wee Seng.

Amid the changing industry landscape brought about by the pandemic, SSIA is also transforming to adapt to the new norm and to better represent the semiconductor industry in the fight against the COVID-19. As a trade association identified by the Singapore’s Economic Development Board (EDB), SSIA has further driven the Electronics Industry Transformation Map (ITM), which is launched by the government focusing on three major categories of transformation for companies – improving productivity, innovation and developing the talent pool.

“In March 2020 and just weeks before the Circuit Breaker was activated in Singapore, we conducted an industry-wide pulse survey among the semiconductor industry. Based on their concerns on sustaining business operations, SSIA has written to the government seeking their support to recognize the semiconductor operations and its supply chain as essential should the COVID-19 situation escalate. We are relieved and thankful that the Singapore government has recognized the semiconductor industry as an essential business under the Circuit Breaker measures,” said Wee Seng.

“Another key area of focus, and even more so now during this pandemic, is workforce development. We continue to encourage both companies and workers themselves to upgrade and upskill. SSIA has partnered with various institutions to offer different courses to our workforce,” notes Wee Seng.

Creating a Pandemic-Proof Industry
Under the ITM, Singapore has outlined its plans to level up the electronics industry, targeting to generate S$22.2 billion (US$16.3 billion) in manufacturing output and hire 2,000 additional professionals, executives and technical personnel by 2020.

However, as the industry grapples with the changes in landscape and adapt to the new normal brought, many companies are now rethinking their strategies.

“According to our recent industry surveys, the impact of COVID-19 is forcing companies to rethink their business strategies for the year, both immediate and long term. Generally, this applies to both SMEs and MNCs. Some companies have even admitted that the digital transformation they have done in the last two months is a lot more than what they did in the last few years. At the same time, they are expediting and increasing investment and implementation toward Industry 4.0, e.g. digitalization, smart manufacturing, and AR/VR implementation,” said Wee Seng.

As part of the government’s safety nets from similar incidents in the future, it relies on building up its already high-skilled local workforce and digitizing process for more automated systems.

“In Singapore, many companies are now accelerating digitalization and increase local workers’ ratio to stay resilient. Investment plans for digitalization are being pulled forward aggressively, and this industry is one of the only few industries who is still hiring. Even the crisis has passed, we will not be returning to an old norm but entering a new ‘post-COVID-19’ era instead. It is now a good opportunity for businesses to reshape the organization and upskill their staff to adapt to this new era,” concludes Wee Seng.