“Through strategic investment, Singapore’s semiconductor industry has emerged as Southeast Asia’s leader in technology and innovation development.”
Singapore Semiconductor Industry: From “Nothing” to Southeast Asia’s Leading Technology Hub
Investment and Technology
THE JOURNEY OF SINGAPORE’S SEMICONDUCTOR INDUSTRY DEVELOPMENT
Singapore, a small country with limited land and a modest population, has risen to become the “Semiconductor Valley” of Southeast Asia. Since the 1960s, the Singaporean government has proactively attracted leading electronics corporations such as Philips and Siemens to invest in the country. Initially, these companies focused on producing consumer electronics. However, as market demands evolved, they shifted towards manufacturing higher-value products, particularly in the semiconductor sector.
GlobalFoundries’ Semiconductor Manufacturing Plant in Singapore
Recognizing the critical importance of developing the microelectronics and semiconductor industry, the Singaporean government identified it as a key sector. This industry not only supports other industries but also plays a vital role in enhancing Singapore’s international standing. With this vision, Singapore invested heavily in research and development (R&D) while creating attractive investment policies to draw international corporations.
One standout example is Philips. When Philips first invested in Singapore, it only produced simple products like irons and radios. However, with government support and a favorable business environment, Philips expanded its production to include more complex components, such as tuners and frequency modulators, for global markets. This helped Singapore gradually build a complete value chain in the electronics and semiconductor industry, from assembly and design to testing and measurement.
Since 1991, Singapore has focused its resources on researching and developing new semiconductor materials while promoting the application of robotics in manufacturing. Today, the microelectronics and semiconductor industry contributes approximately 9% of Singapore’s GDP and accounts for 42% of the total manufacturing output. The country now boasts the second-largest number of semiconductor plants globally, trailing only Taiwan, with the presence of major IC design centers such as Qualcomm, Broadcom, Marvell, and MediaTek.
Singapore semiconductor industry
LESSONS FOR VIETNAM IN SEMICONDUCTOR INDUSTRY DEVELOPMENT
Vietnam, with its geographical advantages and abundant human resources, stands before a significant opportunity to further integrate into the global semiconductor supply chain. According to Decision No. 1018/QD-TTg dated September 21, 2024, the Vietnamese government has outlined a strategy for semiconductor industry development through 2030, with a vision toward 2050. This strategy consists of three main phases:
- Phase 1 (2024–2030): Focus on selective FDI attraction, forming at least 100 design enterprises, one small-scale chip fabrication plant, and 10 assembly and testing facilities. The goal is to achieve annual semiconductor industry revenue exceeding $25 billion, with value-added contributions of 10–15% within Vietnam. The workforce is expected to surpass 50,000 engineers and bachelor’s degree holders.
- Phase 2 (2030–2040): Develop a semiconductor industry combining self-reliance and FDI, targeting at least 200 design enterprises, two chip fabrication plants, and 15 assembly and testing facilities. Revenue is projected to surpass $50 billion annually, with value-added contributions of 15–20%. The workforce is expected to grow to over 100,000 engineers and professionals.
- Phase 3 (2040–2050): Strive to establish a fully self-sufficient semiconductor ecosystem, including at least 300 design enterprises, three chip fabrication plants, and 20 assembly and testing facilities. The goal is to achieve over $100 billion in annual revenue, with value-added contributions of 20–25%.
To achieve these goals, Vietnam must learn from Singapore’s experience, particularly in the following areas:
- Attracting Foreign Investment: Create a favorable business environment, maintain political stability, and establish clear legal frameworks to attract leading technology corporations.
- Developing Human Resources: Invest in education and training and collaborate with universities and research institutes to enhance the quality of the workforce in the semiconductor sector.
- Building Infrastructure: Develop specialized industrial parks with modern infrastructure and support services for businesses in the industry.
- Encouraging Research and Development: Provide support and funding for R&D activities to foster innovation and advance domestic technology.
In practice, Vietnam has already begun drawing interest from major corporations. For instance, in September 2024, Samsung Display Co. announced plans to invest $1.8 billion in an OLED display manufacturing plant in Bac Ninh, bringing Samsung’s total investment in the province to $8.3 billion. Earlier, Foxconn had invested more than $3.2 billion in Vietnam since the 2000s, with plans to expand its production of electronic components and printed circuit boards.
However, to truly become a regional semiconductor hub, Vietnam must continue improving its investment environment, enhancing workforce quality, and advancing research and technology development. Learning from nations like Singapore can help Vietnam shorten its journey and achieve significant milestones in this field.
CONCLUSION
Singapore has demonstrated that even a small nation can emerge as a leading semiconductor hub through well-planned strategies, effective investment attraction, and a focus on research and workforce development.
Vietnam, with its abundant resources and strategic location, is poised to become an essential link in the global semiconductor supply chain. However, realizing this ambition requires Vietnam to learn from Singapore’s successes, particularly in creating a favorable business environment, investing in education, upgrading infrastructure, and fostering research and development. Robust support policies and collaboration among the government, businesses, and educational institutions will be the key to building a sustainable and high-value semiconductor industry in Vietnam. If Vietnam capitalizes on its opportunities and executes the right strategies, it can become a crucial technology hub in the region in the coming decades.
(Vn-Industry.)
Source: Compiled
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