SINGAPORE – The current slowdown in the global semiconductor industry does not dim its prospects, and the latest investment here by European chipmaker STMicroelectronics reflects its strategic perspective, said Deputy Prime Minister Heng Swee Keat on Tuesday (Sept 17).

“The current slowdown is largely due to global economic uncertainties and weaker demand from some end-markets, especially consumer electronics,” said Mr Heng, who is also Finance Minister, at the official opening of STMicroelectronics’ new wafer fabrication facility in Ang Mo Kio.

But he pointed out that there remained areas of growth in the sector, even as official forecasters expect a full-year manufacturing decline for Singapore, and non-oil domestic exports last month stayed in negative territory.

There are more than 60 semiconductor companies in the Republic, making up 11 per cent of global market share. The semiconductor industry forms about 7 per cent of Singapore’s economy.

In spite of slower growth now, the sector had enjoyed strong expansion in the preceding few years, with fresh demand driven by new applications in the Internet of Things, artificial intelligence and mobility services, said Mr Heng.

An area to note is autonomous vehicles, with the global semiconductor market – between electric vehicles and autonomous ones – expected to expand from US$37.4 billion (S$51.5 billion) in 2017 to more than US$58.5 billion in 2023, he said.

STMicroelectronics’ new facility will more than double its capacity to produce eight-inch wafers in Singapore, and aims to augment its strength in the areas of car electrification and digitalisation, and other high-growth industrial processes.

The launch comes just a month after US-based global semiconductor company Micron unveiled its “multibillion-dollar” wafer fab expansion plan in Singapore, growing its clean room space for 3D NAND flash memory products largely made in the Republic.

Mr Heng noted that apart from making next-generation chips and microcontrollers in the new facility, which was officially opened on Tuesday, companies such as STMicroelectronics are investing in their employees, building the local talent pool.

The new facility has added more than 400 new jobs to the company’s current workforce. STMicroelectronics now has close to 5,000 workers here. More than 40 per cent of its front-end manufacturing roles here are that of operators, followed by engineers and technicians.

Noting that 2019 marks the 50th year of STMicroelectronics’ operations in Singapore, Mr Heng said that the partnership between the company and Singapore has “endured through economic crises and challenges”, with both sides pulling through stronger each time.

“During challenging economic conditions, the Singapore Government worked closely with companies like STMicroelectronics to retrain and upskill existing workers,” he said. “As a result, our workforce could emerge stronger and more capable from these difficult times.”

At the event, STMicroelectronics chief executive Jean-Marc Chery said there is an ever-increasing demand for complex electronics systems, which are needed for products that help to solve challenges such as population increases and rising complexities in mobility, among others.

“As a technology-believer and innovation-driven company, STMicroelectronics continues to invest in manufacturing as a key business enabler,” he said. The company, he said, wants to be a leader in automotives, among other areas.

He added that Singapore is a “strategic location” for the company’s investment, with pro-business policies as well as a highly educated and skilled workforce.

The company’s latest expansion sits on a wafer fabrication facility in Ang Mo Kio Avenue 12, which it earlier bought from Micron for US$30 million.