Strong partners can help Singapore build capabilities: DPM Heng

Applied Materials chief executive and president Gary Dickerson receiving the Distinguished Partner in Progress Award on behalf of the US firm from Deputy Prime Minister Heng Swee Keat yesterday. ST PHOTO: MARK CHEONG
Applied Materials chief executive and president Gary Dickerson receiving the Distinguished Partner in Progress Award on behalf of the US firm from Deputy Prime Minister Heng Swee Keat yesterday. ST PHOTO: MARK CHEONG

Singapore is vulnerable to uncertainties in the global environment, and its buffer against present headwinds are companies and workers' capabilities, which will enable it to ride the eventual upturn, Deputy Prime Minister Heng Swee Keat said yesterday.

"But capabilities can only be built if we have strong partners who have confidence in us, who are willing to stick with us through business cycles," he added at the Distinguished Partner in Progress Award ceremony at the Mandarin Oriental hotel.

US firm Applied Materials, which supplies equipment and software for the manufacturing of semiconductor chips, is one such example.

Its commitment here is a "vote of confidence", said Mr Heng, who conferred this year's award to the firm. It has invested more than $100 million here over the past decade.

The award, last given out in 2016, recognises companies that have contributed significantly to Singapore's economic growth and promoted the country's interest in the social and community arena.

It is at least the third time in over a month that Mr Heng, who is also Finance Minister, is shoring up confidence in the Republic's semiconductor sector, as business outlook continues to be clouded by trade war worries, lower demand and slowing economic growth.

Singapore's semiconductor equipment industry had a total output of $21 billion last year, representing more than 20 per cent of the global market.

Mr Heng attributes this, in part, to companies like Applied Materials' significant presence here.

About half its global semiconductor equipment is manufactured in Singapore. It is also the single largest employer in the semiconductor equipment industry here, accounting for more than 10 per cent of a 9,000-strong workforce.

The overall semiconductor industry makes up about 7 per cent of Singapore's economy, accounting for 11 per cent of global market share.

But business sentiment has taken a hit amid expectations of a prolonged trade war, with companies in the industry saying they are freezing headcount.

Mr Heng urged firms to tap programmes that help them deepen industry partnerships, noting that Applied Materials has worked with both small and medium-sized enterprises, as well as public research institutions. These have helped boost local capabilities.

Economic Development Board (EDB) chairman Beh Swan Gin said at the event that at least five new products from the company's etch and deposition product lines were designed and developed in Singapore, showing the value that public research players bring to industry, and the importance of partnerships.

Mr Heng added that manufacturing remains a key pillar of the economy, with advanced manufacturing critical to the sector's transformation and productivity growth.

 
 
 
 

With Applied Materials planning to transform its facility in Changi into a smart factory - its first dedicated advanced manufacturing initiative - Mr Heng said he hopes its lessons can be scaled globally.

Applied Materials' chief executive and president Gary Dickerson said the company's relationship with Singapore is at the foundation of future infrastructure for the data economy - which some say will create more than US$10 trillion (S$13.7 trillion) in economic value.

Beyond manufacturing, new areas for collaboration could include life sciences, he said, adding that the safe environment and access to talent here make the country among the best places for collaboration.

Past recipients of the award, administered by the EDB, include medical technology firm Becton, Dickinson and Company in 2016. It has been in Singapore for about three decades and sites its regional headquarters here, along with its largest manufacturing site and research hub in Greater Asia.

Applied Materials, too, has been here for close to 30 years, said Dr Beh. It was set up in 1991, opening a US$60 million operations centre in 2010 - its largest manufacturing facility outside the United States.

A version of this article appeared in the print edition of The Straits Times on September 25, 2019, with the headline 'Strong partners can help Singapore build capabilities: DPM Heng'. Subscribe