Industry Articles

Electronics Sector Emerges Stronger

SEID2021_ED01_pix1High tech electronic devices and the Internet of things have morphed from nice-to-have luxuries into essential products for many of us.

As 5G, the fifth-generation wireless network, gains momentum in 2020 and beyond, wearable computers, artificially intelligent virtual assistants and smart homes with internet-connected appliances such as refrigerators and vacuum cleaners may just become everyday fixtures in our lives.

According to the “Global Electronic Components Market 2019 Research Report,” the global market for electronic components is predicted to grow at a compound annual growth rate (CAGR) of about 5.6 percent from 2019 to 2024.

Singapore is well positioned to meet the global demand and take advantage of the opportunities that lie ahead.

Since the 1960s, electronics has been the bedrock of the manufacturing sector. In 1968, American microelectronics company National Semiconductor set up shop in Singapore and built Singapore’s first semiconductor manufacturing at 179 River Valley Road, opposite where Liang Court is today. Semiconductor companies Fairchild and Texas Instruments followed soon after. More than 7,000 jobs were created in just three years by those three companies. Siemens (later Infineon) and SGS-Thomson Microelectronics (later STMicroelectronics) were also amongst the first wave of MNCs to establish their presence in Singapore, which helped kick-start the nation’s industrialization journey.

The electronics sector continues to be an important economic pillar for the Republic. Today, the sector creates some 90,000 jobs, or close to one-fifth of the manufacturing workforce. In the first six months of 2019, fixed asset investments in electronics accounted for nearly two-thirds of that secured by the manufacturing sector.

Singapore remains a choice location for companies in the electronics sector. The Republic accounts for 11 percent of the global market share for semiconductors and is home to more than 60 semiconductor companies. It is touted as one of the top locations for advanced semiconductor manufacturing, and more than half of the world’s semiconductor companies have research and development, as well as manufacturing activities here.

In August 2019, Forbes Asia launched its inaugural Best Over A Billion list, which spotlights 200 top-performing listed companies across the Asia-Pacific region with revenues of US$1 billion or more. Nine companies from Singapore have made it to the list, among them were two, ASM Pacific Technology and Venture Corporation, from the electronics sector.

Singapore Building on Position of Strength
Despite being in the increasingly volatile, uncertain, complex and ambiguous global environment; and against the backdrop of the global COVID-19 crisis, Singapore continues to build on its position of strength to create future growth in the electronics sector by focusing on high value-added activities.

“We must continue to invest for the longer term... This way, we will be ready to harness new opportunities when the global demand picks up,” Deputy Prime Minister Heng Swee Kiat said at the official opening of Micron Technology’s new and expanded semiconductor plant in Woodlands.

How to stay competitive goes back to the basic fundamentals, by having a skilled and nimble workforce, good logistics and strong ecosystem with the supporting research and development, DPM Heng highlighted.

In November 2018, Systems on Silicon Manufacturing Company (SSMC) opened its S$300 million cleanroom facility to boost the firm’s automotive and specialty chip manufacturing. Micron Technology’s cleanroom facility, a multi-billion dollar investment that will enable technology transitions to advanced nodes of 3D NAND technology, was launched in August 2019. A month later, STMicroelectronics opened its new wafer fabrication facility which will more than double the company’s 8-inch fab manufacturing capacity. Within 13 months, the expansion of these three companies would create about 1,000 new jobs in Singapore.

Mr Sanjay Mehrotra, Chief Executive of Micron Technology, told The Business Times that the company will continue to make appropriate investments here in Singapore. “Singapore is our centre of excellence for NAND technology and production, and we don’t produce NAND wafers anywhere else.” NAND products make up about 30 percent of Micron’s sales.

To support the growth of the electronics sectors, JTC Corporation is building a 32,000 square metre semiconductor facility in Tampines. The JT semiconSpace will feature a vibration-controlled facility with specifications to meet the stringent requirements of semiconductor operations. It offers companies a “quick-start plug-and-play solution”. The first phase is to be completed by 2021.

JTC is also refurbishing its four wafer fabrication parks to create more vibrant manufacturing workplaces for Singapore’s future workforce. The makeover, which includes adding greenery and connecting them to the islandwide park connector network, is part of the plan to rejuvenate Singapore’s industrial estates.

Said JTC chief executive officer Ng Lang: “As our manufacturing activities continue to evolve, so too should our estates in order for Singapore to remain attractive as a manufacturing destination. These upcoming enhancements are a step forward in making our estates more conducive for our workers.”

“The two moves reflect the opportunities that remain for businesses and workers in the electronics sector here despite current uncertainties”, said Senior Minister of State for Trade and Industry Chee Hong Tat at the inaugural Electronics Industry Day organised to engage young talents early and ready them for the future demands of the industry.

Getting Workforce to be Future-Ready
As the electronics sector transforms, reskilling efforts are also being ramped-up to ensure the workforce and labour pool remain ready and relevant for new and enhanced roles.

“Having the right business strategy or investment cannot make a business successful without the right people to execute. It’s now a challenging time for the industry, but it is also the right time to invest in our workforce and keep our talents,” said Mr Andrew Chong, Chairman of Singapore Semiconductor Industry Association (SSIA).

SSIA, a key partner in driving the Electronics Industry Transformation Map, has been working closely with different agencies such as Workforce Singapore (WSG) and e2i to help companies in talent recruitment, development and retention. The training capacity for the Professional Conversion Programmes (PCP) for Electronics Engineer and Electronics Assistant Engineer was enhanced and an additional 1,000 professionals, managers, executives and technicians are expected to benefit over three and a half years, beginning from November 2019. WSG and SSIA also rolled out a pilot Place-and-Train (PnT) Programme for Electronics Operator to help 50 RnF workers enter or get reskilled into new jobs in the electronics industry over the same period.

Launched in November 2016 under the Adapt and Grow initiative, more than 800 mid-career PMETs have entered new careers through the PCPs for Electronics Engineer and Electronics Assistant Engineer. More than 30 multinational companies and small-and-medium enterprises (SME) have also benefited from an easier access to this alternative talent pool.

In another exciting initiative to drive the adoption of Industry 4.0 technology, JTC Corporation signed a MOU with Delta Electronics International (Singapore) to set up a solutions and training centre to upskill SME partners, and offer automation solutions to tackle issues in the local manufacturing sector. Delta Electronics will help JTC’s customers digitalise their production lines; test-bed advanced manufacturing solutions, and in turn, train and support these enterprises. The tie-up also includes the co-development of training content in leading manufacturing technologies.

According to the Singapore Economic Development Board (EDB), Singapore trains over 13,000 engineers and technicians annually, ensuring a steady stream of talent to the industry. EDB partners companies through various platforms such as the Singapore Industry Scholarships (SgIS), Industry Postgraduate Programme (IPP), and the EDB-NVIDIA Future Talents Program to groom the next generation of foundry engineers, IC designers, and AI talent.

Many electronics companies also provide a wide range of internship places and they collaborate with institutes of higher learning to offer students experiential learning experiences.

“The emergence and growing adoption of new technology applications in fields such as artificial intelligence, autonomous vehicles and smart manufacturing are long-term growth drivers that will fuel strong and diversified demand for semiconductor solutions,” said Mr Pee Beng Kong, Executive Director for semiconductors at EDB.

In The Business Times article, Is Singapore’s semicon sector on the skids? published on 9 November 2019, Mr Pee pointed out that the new technology markets are expected to account for more than 50 percent of Singapore’s semiconductor sector by 2030.

It augurs well that the semiconductor sector has ranked among those leading the way in adopting Industry 4.0 technologies, based on a EDB study of 200 firms that have undergone Smart Industry Readiness Index (SIRI) assessment.

The semiconductor industry accounts for more than 7 percent of Singapore’s gross domestic product, or total economic output, and is one of the largest industries within the country’s manufacturing sector. It employs 35,000 workers across 60 semiconductor companies. To future proof the businesses for a post-COVID world, companies need to upskill their manpower and innovate.

Electronics Manufacturing Services
Many of the world’s top Electronics Manufacturing Services (EMS) companies such as Flextronics, Solectron, and Venture are located in Singapore.

The “Global Electronic Manufacturing Services Market - Forecasts from 2020 to 2025” report by Research and Markets highlighted that the global electronics manufacturing services market is estimated at US$165.354 billion for the year 2019 growing at a CAGR of 14.17 percent to reach the market size of US$366.208 billion by 2025.

The growing demand for electric vehicles is one of the prime opportunities for electronic manufacturing service providers. The rising penetration of smart and handheld devices such as smartphones and tablets is also bolstering the growth of the market.

Original Equipment Manufacturers (OEM) are increasingly integrating advanced electronic components into electronic devices. There are also increasing opportunities for EMS companies to pursue areas such as medical devices and aerospace. Another electronic component technology that is being developed is the Organic Light Emitting Diode (OLED), which is gradually replacing LCD panels.

Data Storage
Singapore has emerged as the third most robust data centre market worldwide in a global ranking of 38 countries, and the only mature data centre market in South East Asia, according to a report released by Cushman & Wakefield.

As compared to 2017, its ranking jumped four spots from seventh to third in 2019 and it retained the top position in the Asia-Pacific region. Singapore has attracted a number of tech companies to set up data centres here, the report noted.

Research and consulting firm IndustryARC reported that the global data storage market was valued around US$35 billion - US$36 billion in 2018, and it is estimated to grow with a progressive CAGR of 18 percent to 22 percent over a forecast period 2019-2025. The analyst of the report attributes the prosperity of the data storage market to the radical adoption of cloud-based infrastructure by enterprises in order to increment their productivity.

Spurred by the rapid pace of digitisation and a surge in demand for cloud-based services, it is projected that the South East Asia region, including Singapore, Indonesia and Malaysia, will be the fastest-growing region for co-location data centres over the next five years, with its market size expanding by a CAGR of 13 percent between 2019 and 2024.

Facebook’s more than US$1 billion (S$1.38 billion) data centre in Singapore is slated to open in 2022. “It would be its first in Asia, and 15th in the world, a strong testament to Singapore’s continued strength as a global data centre powerhouse,” Cushman & Wakefield said.

International Data Corporation (IDC) predicts that the Global Datasphere will grow from 33 Zettabytes (ZB) in 2018 to 175 ZB by 2025. To keep up with the storage demands stemming from all this data creation, IDC forecasts that over 22 ZB of storage capacity must ship across all media types from 2018 to 2025, with nearly 59 percent of that capacity supplied from the Hard Disk Drive industry.

Power Electronics
According to the Research and Markets, the global lithium ion battery market, valued at US$ 21,850.65 million in the year 2019, has been witnessing unprecedented growth in the last few years. Increasing demand from automotive sector and the demand for sustainable resource among the leading countries is one of the major reasons behind the increasing lithium ion battery market globally.

Research and Markets also projected that the global market for consumer batteries will reach US$50 billion by 2025, driven by the growing indispensability of batteries in the digital era of laptops, smartphones, tablets, smart electronic wearables and digital cameras. As the most important portable power source, batteries are omnipresent in virtually every sector that utilizes electronic/electrical equipment, the report highlight.

Riding the wave for portable energy storage, Murata Manufacturing acquired Sony’s battery operations for US$156 million (S$ 211.5 million) in 2017 and injected another US$453 million to upgrade production sites in Singapore and China. Its Singapore plant produces more than half of its lithium ion batteries. To expand its market share and offer new battery line-ups, the company is leveraging on local capabilities to accelerate development and manufacturing of its latest innovations. Murata is collaborating with Singapore universities, JTC, and EDB to test and develop its Smart Energy Management System in Singapore. One such project is a 200kWh energy storage system for an offshore integrated network of renewable energy resources at Semakau Landfill.

Battery maker Energizer was cited by NTUC Secretary-General Mr Ng Chee Meng for bringing in more advanced technology for its line machines. The United Workers of Electronics and Electrical Industries union worked with an institute of higher learning to curate a training programme for Energizer’s operators to improve their skills for the new machines.