Is Singapore hitting the skids as electronics hub?
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Is Singapore hitting the skids as electronics hub?
By Jonanthan Hopfner
EE Times
(09/16/2005 10:53 AM EST)
SINGAPORE — Despite this city-state's loss of some manufacturing operations to cheaper destinations such as China and Malaysia, officials and analysts insist Singapore can still count on its skilled workforce, first-rate infrastructure and pro-business policies to maintain its status as an Asian electronics hub.
Lim Swee Nian, director for electronics at Singapore's Economic Development Board (EDB), acknowledged that the emergence of lower-cost locations "will always pose a challenge to Singapore" but said the country saw itself "competing on the grounds of overall costs instead of just labor costs alone."
This year has proved to be mixed for Singapore's electronics industry, with companies such as hard-drive maker Maxtor and consumer electronics firms Creative and Aiwa all cutting jobs or shifting manufacturing elsewhere. In July, National Semiconductor announced the closure of its local facility to consolidate production at its other assembly and test plants in Melaka, Malaysia and Suzhou, China. In August, Agilent Technologies announced the sale of its Singapore-based semiconductor operations and the transfer of some1,800 local staff to two private equity buyers.
Gartner semiconductor analyst Philip Koh said the reallocations were the culmination of a trend that began in the 1990s with China's emergence as an economic power. "We saw China start to suck more electronic equipment manufacturing, not only from Singapore but also from Malaysia and Indonesia," he said. "In recent years more and more manufacturing has been shifted to the mainland. Companies are looking for lower-cost destinations, especially in manufacturing, to make their products more cost competitive."
Koh said Singapore's ability to attract investment in more leading-edge technologies would prove the deciding factor in the continued success of its manufacturing sector, which currently accounts for about a quarter of the economy.
"Singapore needs to continue to move up the value chain in order to stay competitive in the semiconductor industry," he said. Singapore is moving "towards value-added/high-end manufacturing and also into the R&D marketplace, where we continue to attract IC design, product and investments."
Koh added that Singapore should concentrate on developing its front-end wafer fabrication capabilities, expanding on the 14 fabs based here already. -
Well, the only type of electronics stuff we can do, is left with higher ended products like fab
Our wages and land cost are just too high -
It is sad but true that our manufacturing sector is not powered or facilitated by an economic master plan identifying strategies you mentioned in the foregoing. Smaller and smaller mobile harddisk are taking over the reign in computers. It is increasingly popular and will propell new growths in manufacturing of computers and telecommunications.
I have suggested to Feedback Unit to adopt an economic master plan to better coordinate and strategize our industries so that we will always catch the right opportunities at the right time but my suggestions were probably too difficult for them to consider.
Instead, EDB is taking the general pro-investments approach of incentivising foreign MNCs and selected industries on case by case. EDB is sending scholars to do courses in US and western advanced countries and hope that these scholars do not break bonds.
I suggest that an economic master plan, EDB and senior ministers and whole cabinet are involved in overseeing practical planning and strategizing of diverse opportunities that suit our locational and other advantages. By leveraging on the new advantages afforded by IR, we will have more value-adding in many more sectors among other cost-affected industries.
EDB by using the economic master plan incorporating mobile harddisk manufacturing and hand-phones, solar powers, and fuel cell cars etc, bio-tech etc can follow up with creating new technology start-ups and macro-tune our current general investment approaches to success.
The whole cabinet must be geared up for tapping on newer advanced manufacturing opportunities. General investment-centred incentives will only bring in certain level of industries whereas proactive opportunity seeking among our entrepreneurs will enliven the whole investment climate, especially we have the IR and good location and call-centre management excellence to use as stimulants. -
The main issue right now is the COST. It is true that Sg has one of the best infrastructures and political stability in the Asia Pac region. In the past, we have managed to attracted many big guys to setup offices and distribution centres or even regional centres in Sg. But with our SGD gets stronger and stronger, all our neighbour dollar value shrinks. It makes Sg an expensive place to invest.
It is a very real threat that if the trend for MNC relocation continued, Sg will face a BIG BIG problem to maintain her status as a hub. Take Matrox and Seagate for example, they used to have the most advanced facilities outside US, to be located here. Thus, Sg will be attractive for them to become their Distribution Centre (logistic), Regional HQ. But when the manufacturing facilities moving out, going closer to their targeted market, it is quite clear that the Regional HQ or even Distribition Centre may go along. What might be left is some R&D lab for some tax rebate. We are losing the entire supply value chain rapidly, such faster than our EDB high paid officials had anticipated.
Our EDB guys find it hard to believe that their good pro-industrial policies are losing their attraction. They refused to admit that costing is a critical factor for any business decision. Why? very simple, these EDB guys with their golden rice bowl are not really graded by their performance (how much investment that they bring in), they still sit on their comfortable zone even the FDI in Sg goes south. But this is entirely different in business world. The CEO will need to justify the cost to setup a business, cost is the ultimate factor that decide if the CEO will stay or get kicked in the butt!
The past 2 years, I have been able to get in touch with the EDB / IMRE / SIMtech guys. Their qualification are very high, most of them PhDs. But with little or no industrial experiences neither do they really understand how a business actually operate in real life. In one of the meeting, I even saw a young business manager from a reputable organization busing playing around and SMSing with his phone! What a attitude!
In one of the most advanced wafer fab in Sg, it is a common sight that majority of the engineers are PRC Chinese and Taiwainese nationalities. The technicians are mostly from Indian, malaysian and philipines. Most of the operators are malaysian or PRC chinese. While only a handful of singaporean are working there. Thus, it is not hard for the business leaders in this adavanced wafer fabs to shift the manufacturing facilities out of Sg later.
Already Infineon has selected Malaysia site for their 200mm wafer fabs. The Infineon has reasoned that Malaysia should offer better COST advantages and similar quality of skilled manpower. Currently, our electronic sector is still struggling to find growth in Q3, when Taiwan, Korea and China micorelectronic sectors are already recovering and expected to excel in 2006.
It is good that PM Lee has highlighted that importance of R&D for our manufacturing pillar. We hope to see people who are familiar with the industries to help Sg to chart our way towards another great leap of growth! -
The main issue right now is indeed cost. It is not until cost is recognized as the major factor that we will have the necessary right kind of policy in place such as working full steam ahead to cut down unnecessary loading of costs onto the private sector by all government departments and agencies.Originally posted by archon1234:The main issue right now is the COST. It is true that Sg has one of the best infrastructures and political stability in the Asia Pac region. In the past, we have managed to attracted many big guys to setup offices and distribution centres or even regional centres in Sg. But with our SGD gets stronger and stronger, all our neighbour dollar value shrinks. It makes Sg an expensive place to invest.
It is a very real threat that if the trend for MNC relocation continued, Sg will face a BIG BIG problem to maintain her status as a hub. Take Matrox and Seagate for example, they used to have the most advanced facilities outside US, to be located here. Thus, Sg will be attractive for them to become their Distribution Centre (logistic), Regional HQ. But when the manufacturing facilities moving out, going closer to their targeted market, it is quite clear that the Regional HQ or even Distribition Centre may go along. What might be left is some R&D lab for some tax rebate. We are losing the entire supply value chain rapidly, such faster than our EDB high paid officials had anticipated.
Our EDB guys find it hard to believe that their good pro-industrial policies are losing their attraction. They refused to admit that costing is a critical factor for any business decision. Why? very simple, these EDB guys with their golden rice bowl are not really graded by their performance (how much investment that they bring in), they still sit on their comfortable zone even the FDI in Sg goes south. But this is entirely different in business world. The CEO will need to justify the cost to setup a business, cost is the ultimate factor that decide if the CEO will stay or get kicked in the butt!
The past 2 years, I have been able to get in touch with the EDB / IMRE / SIMtech guys. Their qualification are very high, most of them PhDs. But with little or no industrial experiences neither do they really understand how a business actually operate in real life. In one of the meeting, I even saw a young business manager from a reputable organization busing playing around and SMSing with his phone! What a attitude!
In one of the most advanced wafer fab in Sg, it is a common sight that majority of the engineers are PRC Chinese and Taiwainese nationalities. The technicians are mostly from Indian, malaysian and philipines. Most of the operators are malaysian or PRC chinese. While only a handful of singaporean are working there. Thus, it is not hard for the business leaders in this adavanced wafer fabs to shift the manufacturing facilities out of Sg later.
Already Infineon has selected Malaysia site for their 200mm wafer fabs. The Infineon has reasoned that Malaysia should offer better COST advantages and similar quality of skilled manpower. Currently, our electronic sector is still struggling to find growth in Q3, when Taiwan, Korea and China micorelectronic sectors are already recovering and expected to excel in 2006.
It is good that PM Lee has highlighted that importance of R&D for our manufacturing pillar. We hope to see people who are familiar with the industries to help Sg to chart our way towards another great leap of growth!
There is no need to push up costs of doing business to skyhigh level as we are now doing using all kinds of excuses to do so. Import duties on cars can now be scrapped as it is ably substituted by COEs. High land costs need not be that high as lands are already paid for by the tax payers out of public funds.
Incentives of all kinds given to foreign investments should be channelled back to domestic economy to promote SMEs as well to help reduce the present high costs.
Government leaders for years have been stubbornly sticking to non-welfare and full market fee policies to make government rich and efficient. Private sector to that extent is being whittled down to lose all its fizz. Unless something urgent is done, there will be more MNCs transferring their operations out of Singapore. Don't believe this - wait to see more Maxtors and others leaving next year. -
The real issue is that the cost of Sg industry is due to land cost, electrical cost, water cost and manpower cost. The problem is that to employ an engineer in a semicon wafer fab in korea or taiwan, we can employ about 0.8 engineer in singapore in the same industries. Dun forget, the employer needs to pay the 13% CPF contribution.
Worst still Sg standard of living very high, Sg people are not interested to work long hours and grave yard shifts. Moreover, Sg is not active in cutting edge semicon R&D. Most of young people in Sg are not interested in engineer works, rather they are more interested in MLM, shares and option trading, forex, property and insurance selling - easy money mah who dun want! Our mindset of singaporean is not on par with the Taiwanese and Korean. W/O a strong industry base, how can our country prosperous by simply depending on stock markets, game industries and property selling... seems to me that we are going the way of Hong Kong. -
has singapore ever took off as a hub of anything?
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I thought we moving towards the biomedical side?
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Biomed hub, electonic hub or entrepolis hub, all are just slogan.
Have u heard any such solgan from Korea, taiwan and Jap?
Bet u, not right? Their people mindset is very different from our worldclass efficient EDB official lah. In far east countries, people only want to see true results and real action plan. they are after real $$ in profits.
But the Sg, on the other hand, always love to use data chart and comparing ratio and percentage to mask our poor real-life performance. If our real life performance in attracting foreign investment is so gd, then we dun need all these marketing slogan like "elctronic hub", "biomed" hub or "trading" hub...
In a way, this slogans also reflect the mindset of our "world-class" officials...they semms to be really clueless of the REAL world development (maybe they are so well paid and wee sheltered that they live in a world of their own, that why we always like to use the term"WORLD CLASS")
Investors around the world is only interested in RESULTS - $$$$, if we cannot meet their expection, no matter how world class are we, they will still give us a miss for sure. This is a real business world not a charity world - NKF world -
Our local top officials kept harping on selling spore as a springboard to China and India for foreign MNCs, such myopic ideas, who needs to set up HQ in Spore when they can capitalise on cheaper land cost and lower wages in these giant economic machineries. Our advantage in bilingualism has limited impact, the scarcity of jobs in China has driven the hungry Chinese to trained themselves to be bilingual.
In fact, when i was in Shenzhen recently, the young ang mos with laptops cross-slinged were roaming the city and hanging out in Starbucks accompanied by local chinese, (whom i may add, spoke perfect english with american accent) discussing business and cutting small deals . The point is, who needs a middleman(spore) ? The go getters: young generation of business oriented ang mos are BOLD....the Chinese are HUNGRY, and both are redefining the traditional methodology of doing business. They are fearless with no language barriers. Its really exciting to observe such phenomenon unfolding.
Our dear leaders should wake up to these realities and reposition our so-called advantage, and think of more radical ideas to 'market' spore. -
Well, external factors we can't control
Like co moving to countries like China because they follow where their customers go.
But, I think we have the power to stay them here bah?
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absolutely.Originally posted by archon1234:The real issue is that the cost of Sg industry is due to land cost, electrical cost, water cost and manpower cost. The problem is that to employ an engineer in a semicon wafer fab in korea or taiwan, we can employ about 0.8 engineer in singapore in the same industries. Dun forget, the employer needs to pay the 13% CPF contribution.
Worst still Sg standard of living very high, Sg people are not interested to work long hours and grave yard shifts. Moreover, Sg is not active in cutting edge semicon R&D. Most of young people in Sg are not interested in engineer works, rather they are more interested in MLM, shares and option trading, forex, property and insurance selling - easy money mah who dun want! Our mindset of singaporean is not on par with the Taiwanese and Korean. W/O a strong industry base, how can our country prosperous by simply depending on stock markets, game industries and property selling... seems to me that we are going the way of Hong Kong.
Something is wrong with the culture.
No one's interested in R&D even when that is the direction forward.
Government is still talking abt manufacturing
when we shud be moving up to R&D.
And not i dun mean jus research.
Without world-class cutting-edge R&D development,
no amount of pure research can bring fruits.
Those Astar/grament people are acedemic people
with little/no industry experinces to lead the right direction.
All those research funds will simply go to drain.
We cannot simply go from manufucturing to research, without engineering.
Manufacturing will move out of sg becos of cost.
There is no stopping of the wave.
(the reasons behind the high cost of living is another topic)
With
-no recogintion for the profession,
-low pay
-FTs influx wo proper filtering
-plus wrong direction of the government towards research
and manufacturing initiative
how can the industry move forward!!!?!?!?
The main direction forward shud be world-class R&D engineering.
not manufacturing or pure research.
We have to do R&D engineering as in more develpoment work
b4 we can do research.
Im only afriad all those money pumping into manufacturing
and research will only drain our tax payer $$ to waste.
I have frens who had gain yrs of experinces in engineering
in IC design n sw... reaching world-class standard...
only to give them all up and jump to a more lucrative and easy life field.
How can industry move forward and compete with
india, taiwan and korea with this type of culture??? -
Even no one is interested in R&D
Think of this, no R&D, would things like thumbdrive come along?
It is just a unsung hero -
Thumbdrive is abt innovative D not R. R&D without the R in a way.Originally posted by sbst275:Even no one is interested in R&D
Think of this, no R&D, would things like thumbdrive come along?
It is just a unsung hero
Even compaines lik creative comes from R&D no R back ground.
Lik Ipod, its really jus innovative D + lots of markting strategy.
Sometimes I really just shake my head for the lack of industry
understanding from the government. -
You have misunderstood the meaning...Originally posted by NuLife:Thumbdrive is abt innovative D not R. R&D without the R in a way.
Even compaines lik creative comes from R&D no R back ground.
Lik Ipod, its really jus innovative D + lots of markting strategy.
Sometimes I really just shake my head for the lack of industry
understanding from the government.
Development means the development of the research into a product
Not development what marketing skill... -
no la. i dun think i misunderstand la.Originally posted by sbst275:You have misunderstood the meaning...
Development means the development of the research into a product
Not development what marketing skill...
or issit u misunderstood my reply?
"Not development what marketing skill... "
huh??? -
Let me tell you thisOriginally posted by NuLife:Thumbdrive is abt innovative D not R. R&D without the R in a way.
Even compaines lik creative comes from R&D no R back ground.
Lik Ipod, its really jus innovative D + lots of markting strategy.
Sometimes I really just shake my head for the lack of industry
understanding from the government.
R&D comes in together
Innovative is in bth R and the D
Why?
You need to be creative in Research
You also need to be creative in development of the final product...
If that's the case, then the thumbdrive example would be, it has been thought of, but no final product as ppl heck care abt the D -
I think there is often a different interpretation of R by different people.Originally posted by sbst275:Let me tell you this
R&D comes in together
Innovative is in bth R and the D
Why?
You need to be creative in Research
You also need to be creative in development of the final product...
If that's the case, then the thumbdrive example would be, it has been thought of, but no final product as ppl heck care abt the D
I face that all the time when discussing w frens.
Yes, I agree R&D "generally" refers to the deveplment products
in sg copmanies, such as doing R&D in companies like HP,creative.
But some will argue, infact alot of people will,
that "research" generally refers to writing/publishing papers
(not patents) to the research communities, lik IEEE/IEE etc.
like what they do in univerisities researching new semicon process,
new semicon materials via diff physics theory, new algorithms,
new maths formula, new protocols for 4G mobiles.
which if successful, wil take sometimes 10-20 yrs to reach the market,
but many relaly just remain that way, a paper.
Thus in the eyes of many engineers, thumbdrive is a design/development.
perhaps you can say theres creative "research" here.
but to others, its "innovative design development". not research.
At least in the eyes of the engineering community.
Perhaps, "Design&Development" Invention is a better word.
Yes, innvation is a must in research too. but im only trying
to explain the diff views on "research"
So i guess, thats where the misunderstanding is.
cheers