​​​Singapore has solidified its position as a pivotal player in the global semiconductor landscape. According to ASEAN Briefing (Medina A.Y., 2024), the nation's semiconductor manufacturing sector generated over S$133 billion (approximately US$101 billion), accounting for nearly 6% of Singapore's GDP in 2023 and employs over 35,000 people.

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According to EDBi Singapore (2025), Singapore contributes 10% of the world's total semiconductor output and 20% of global semiconductor equipment production. The market size of semiconductor is poised to grow, driven by advancements in artificial intelligence (AI), electrification, and 5G - the semiconductor industry is on track to reach US$1 trillion (S$1.34 trillion) in market size by 2030.

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Key factors contributing to Singapore's prominence in the semiconductor industry include:

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• Strategic Location: Situated at the crossroads of major Asian markets, Singapore offers unparalleled connectivity, facilitating efficient supply chains and access to global markets.
   

• Robust Infrastructure: The nation's world-class logistics, stable power supply, and advanced water treatment systems support the intricate requirements of semiconductor manufacturing.
   

• Skilled Workforce: With a workforce of around 35,000 professionals in the semiconductor sector, Singapore benefits from a steady pipeline of talent nurtured through collaborations between educational institutions and industry leaders.
   

• Government Support: Featured in TODAY (Wong P.T., 2020), the Singaporean government has committed S$25 billion between 2021 and 2025 to foster research, development, and innovation within the semiconductor sector. Initiatives like the Refundable Investment Credit (RIC) and the Enterprise Innovation Scheme (EIS) provide financial incentives to companies investing in research and development (R&D) and innovation.
  
  RIC offers up to 50% support for qualifying expenditures such as manpower costs, professional fees, materials, logistics, and capital expenditures. The credits can be used to offset corporate income tax, with any unutilised credits refundable in cash over four years. This initiative seeks to attract investments in high-value economic activities, including semiconductor R&D.Whereas, EIS supports activities such as R&D, intellectual property registration, intellectual property (IP) acquisition, employee training, and collaboration with polytechnics or qualified partners. Under this scheme, businesses can benefit from a 400% tax deduction or allowance on qualifying expenditures, capped at S$400,000 (US$304,000) annually until 2028.

​​Southeast Asia is rapidly emerging as a critical hub in the global semiconductor supply chain. Driven by investments from global semiconductor giants and supportive government policies, the region's semiconductor market is projected to reach more than US$200 billion in chip exports with Malaysia targeting to achieve US$270 billion in semiconductor exports (Priyadarshi K., 2024).

 

Notable developments include:

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• Wafer Chip Plant in Singapore: Taiwan-based Vanguard International Semiconductor Corp and Netherlands-based NXP Semiconductors are building a US$7.8 billion wafer chip plant in Singapore with production expected to begin in 2027. This move underscores Singapore's strategic importance in the global semiconductor supply chain, further enhancing Singapore's role in supplying critical components to industries in automotive, industrial, consumer, and mobile applications (The Straits Times, 2024)
   

• Malaysia's Vision Valley: The Negeri Sembilan Semiconductor Valley (NSSV) is part of Malaysia's Vision Valley initiative, aiming to transform the region into a major semiconductor powerhouse. The project has attracted significant investments and is poised to enhance Malaysia's position in the global semiconductor market.
   

• Regional Collaboration: Events like SEMICON Southeast Asia 2024 in Kuala Lumpur highlight the region's commitment to enhancing supply chain resilience, sustainability, and workforce development in the semiconductor industry.

Future Outlook

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The semiconductor industry in Singapore and Southeast Asia is poised for continued growth, driven by:

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• Technological Advancements: Innovations in artificial intelligence, 5G, and quantum computing are increasing demand for advanced semiconductor components.
   

• Supply Chain Diversification: The global shift towards diversifying supply chains, particularly in light of geopolitical tensions, is prompting companies to invest in Southeast Asia as an alternative manufacturing base.
   

• Sustainability Initiatives: Companies are increasingly adopting environmental, social, and governance (ESG) practices, with major players like TSMC and Intel committing to renewable energy usage and carbon footprint reduction.

 

In conclusion, Singapore and Southeast Asia are well-positioned to leverage their strategic advantages, skilled workforce, and supportive policies to drive innovation and leadership in the global semiconductor industry.