DPM Lawrence Wong at the GlobalFoundries Fab 7h Grand Opening

PM Lawrence Wong | 12 September 2023

Speech by Deputy Prime Minister and Minister for Finance Lawrence Wong at the GlobalFoundries Fab 7h Grand Opening on 12 September 2023.

Chairman, board members and CEO of GlobalFoundries
Distinguished Guests,
Ladies and Gentlemen,

I am very happy to join you for Global Foundries expanded Fab 7h opening here in Singapore. And a very warm welcome to all our overseas guests.

It is extra special for me to be here, because Global Foundries site resides within the constituency of Marsiling Yew Tee, for which I am a representative in Parliament. And it so happens that obviously, many of my residents work here. In a down cycle, the tendency for all companies is to hunker down and to scale back your spending and investments. That is very natural. It takes great courage and foresight to have a contrarian view, to look beyond the cycle and the longer-term trend and to say: “I will continue to invest, in fact, I will double down and invest despite the down cycle”.

But Global Foundries (GF) has a consistent track record of doing so. Because when GF first entered Singapore in 2010, the world had just emerged from the Global Financial Crisis. The semiconductor industry was then facing weak consumer demand too. All industries go through cycles, but I think the semi-conductor industry is well known for your boom and bust cycle. There are good years that are truly exceptional, and they have bad years that are really bad. Hopefully the cycles won’t become as volatile as they used to be. But to thrive in this industry, you really need to take a long term view and continuously innovate and adapt to changing market conditions. And that is what precisely what Global Foundries has been doing. You decided to invest for the long-term when you decided to acquire Chartered Semiconductor Manufacturing, and merge its operations into the GF venture. A few years ago, in the darkest moments of the pandemic, you then decided to invest and expand your Singapore fab. Today, GF is one of the largest wafer foundries in Singapore – with over $5 billion in fixed asset investments, and with more than 4,900 employees. So we are very happy to be with all of you, the board management, staff of Global Foundries as well as our customers here to mark this very happy occasion. Congratulations once again.

Since GF set foot in Singapore, the global landscape has changed significantly. We are now in a far more contested and uncertain world. Countries that don't have to be friends to do business with one another. Countries worry about interdependence being weaponised and everyone wants greater control over supply chains. So the new realities of business are driven not just by economic logic, but also geopolitical alignment and national security.

Amidst this upheaval, we are seeing a race for leadership in semiconductor chip production. Over the last century, steel and oil were the foundational materials for industrial success. In the 21st century, silicon wafers are the new steel and oil. All advanced tech – from automated systems to AI-powered solutions – will require cutting edge chips. And in an increasingly digitised world, computing power will be the new key strategic resource. That is why major countries around the world are scrambling to control the production and technology of chips.

All this has resulted in intense global competition for high-end semiconductor investments. We have seen the big countries like the US, China, Japan and European Union roll out massive subsidies to build up production capabilities in semiconductors closer to home. It will not be possible for small countries like Singapore to outbid these large players at the level of subsidies they are offering. There will be instances where we have to forgo new investment projects, because we cannot afford to engage in a subsidy arms-race.

Yet the good news is, despite these challenges and these new circumstances, we believe Singapore will continue have a strong, competitive and vibrant semi-conductor industry here. We are certainly not the cheapest location worldwide; but we do have many things going for us – our excellent connectivity; our reliability and stable business conditions; and also, a critical mass of leading companies based here which cover the entire value chain, from design to wafer fabrication, to assembly and testing. We have no natural resources but our key asset is human capital – we have strong innovation and research capabilities. We have a well-educated and highly-skilled workforce, especially in the areas of stem design and engineering. All these factors have enabled us to build an attractive eco-system that enables companies to achieve sustained growth, and to create good jobs for Singaporeans. In particular, over the years, we have carved out a niche in the production of specialty chips. These are chips that are present in almost every device we use in our daily lives, and will continue to be in strong demand given the trends in 5G, automotives, and Internet-of-Things. We will continue to sharpen our capabilities and enhance our competitiveness in these specific areas of strength. We cannot play in all areas of semiconductors. We probably will not be able to play in a high-end space either. But in specialty chips, I think we have competitive advantages and strengths, and we will continue to build on them.

That is why we have seen new investment commitments by several chip makers in Singapore in the past year.

And this latest investment by GF demonstrates that our strategies are working. Fab 7h will be the first wafer fab in Singapore capable of manufacturing specialty chips at 28nm. These are chips supporting a wide range of applications in both consumer and industrial products. In other words, there is a high chance that the image sensors and radio frequency chips inside smartphones and electric vehicles (EV) of the future, will be made from GF’s Singapore fab. You would not see a “Made In Singapore” logo, but you take a smartphone, you drive a EV, there is a good chance that there will be a “Made In Singapore” chip in these devices or cars. To support the production of these chips, Fab 7h will create up to 1,000 high-value jobs. The majority of these will be filled by Singaporeans, who will benefit from picking up the manufacturing and R&D know-how, from these high-end technologies. GF’s decision to invest here – and not anywhere else – says a lot about the high level of conviction you have in Singapore. So to the board and management of GF, thank you for your confidence in our people, our government and our capabilities. Thank you very much. Singapore’s partnership with GF has been forged over many years of close cooperation – it is a partnership anchored on trust and a shared focus to build for the long-term. That’s what we have been consistently doing in Singapore – nurturing our students’ interest and skills in STEM to build a strong talent pipeline; investing heavily in R&D and developing new capabilities to sharpen our competitive edge. GF is already an partner in so many of these areas as you heard just now from Yew Kong. You are a familiar face to our Institutes of Higher Learning (IHLs), through your active outreach programme, industry visits and internships. You also take a keen interest in training in-service employees, as seen from your Industrial Scholarship Programme with the Nanyang Technological University (NTU). I understand that more than 30 GF employees have been given the opportunity to conduct industry-relevant PhD research, since the programme started.

GF has also invested heavily in R&D and has been a steadfast partner of our research institutions, with several projects ongoing with NTU and the National Research Foundation. In fact, GF has one of the largest corporate R&D teams in Singapore with more than 700 R&D professionals based here. We welcome these close links in research, and hope to do more together. We recognise that R&D cycles in the semi-conductor industry can be very long. But as long-term partners, we can ride through these cycles, and achieve new breakthroughs that will benefit GF, benefit the wider semi-conductor industries and also Singapore.

So to conclude, GF has proven itself to be a very valuable partner to Singapore in driving growth for our semiconductors industry and also creating good jobs for Singaporeans. Your achievements today would not have been possible without the commitment and contributions of everyone in GF – the board, the management and staff members, past and present. Thank you everyone once again for your continued efforts all these years and congratulations on these important milestone in your journey.

As partners, I am confident that we can scale even greater heights. I look forward to creating many more successes together in the coming years. Thank you very much.