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Singapore bucks electronics slump
By Tony Sitathan
SINGAPORE -
Despite the slip in Singapore's gross domestic product
(GDP) from an estimated 3.5-5 percent to a more
conservative 2-2.5 percent growth for 2002, its
electronics industry continues to be a ray of sunshine
for the tiny island republic.
According to a
recent report from the Economic Review Committee in
charge of manufacturing fixed asset investments (FAI),
commitments in the electronics and precision-engineering
cluster have managed to peak at almost US$3.2 billion,
amounting to more than 60 percent of total manufacturing
FAI commitments since last year. This was in contrast to
a slip by almost 0.9 percent in non-oil exports for the
last quarter, which is used as a measurement of its
export economy.
"Things are not too gloomy after
all, despite Singapore having the highest unemployment
rates in history [at about] 4 percent," maintained Jimmy
Tan, an manager with more than 15 years' experience with
a Fortune 500 manufacturing company. "It is looking at
more upscale electronics production from wafers to
optoelectronics and photonics, including production in
the biosciences and the pharmaceutical industry," he
said.
The most recent coup comes in the form of
the opening of Advanced Flat Panel Displays (AFPD), a
US$1 billion liquid crystal display (LCD) plant that is
a 60:40 joint venture between Toshiba Corp (the majority
shareholder) and Matsushita Electric Industrial Co. The
AFPD plant is the biggest thin-film transistor (TFT) LCD
factory outside of Japan and is considered the world's
biggest production plant as well. It is aimed to capture
a big slice of the LCD screens found in notebook
computers, desktop computer monitors and color
televisions.
Corrine Tay, a principal analyst
for Insignia Solutions, a Hong Kong-based
market-research company specializing in flat panels,
said the LCD market worldwide is worth a whopping $35
billion. "The LCD market is a hot growth area and it's
expected to grow by at least 20 percent per year over
the coming years, fueled by demand for next-generation
video-capable mobile phones, PDAs [personal data
assistants], portable PCs [personal computers], desktop
LCD TVs and monitors, and personal DVD [digital video
disc] players coming into the market," she said. She
also maintained that the main reason for this stellar
growth is LCD monitors displacing traditional computer
cathode ray tube (CRT) monitors.
Trade and
Industry Minister George Yeo maintains that Singapore is
in a prime position to take advantage of this
phenomenon, making it a global leader in
flat-panel-display manufacturing almost overnight. "The
opening of Advanced Flat Panel Displays' LCD plant not
just heralds the birth of a new sector in the republic's
manufacturing industry but meets our objective to make
Singapore an attractive hub for value-added
manufacturing incorporating R&D [research and
development], applications development, high-value-added
production, global sourcing, and supply chain
management," he said.
Tadashi Okamura, president
and chief executive officer of Toshiba Corp, said this
collaboration with Matsushita will help to promote these
LCDs as the main display of choice for next-generation
products. "The joint venture allows us to fuse advanced
technology from both partners, and will assure that
Toshiba can solidify its leadership in the
low-temperature-polysilicon LCD market," he said. He was
also optimistic that the electronics outlook for next
six months would be much higher and more certain than
now.
Singapore was chosen after much
deliberation and extensive research by Toshiba. Yasusuke
Sumitomo, president of Toshiba Matsushita Display
Technology Co, the parent of AFPD, said Singapore was an
ideal location because of its strengths in several key
areas. "Singapore met the key criteria for manufacturing
advanced displays since it has a skilled highly
motivated workforce, including engineers, a
well-developed semiconductor sector which has close
support from the chemicals suppliers, and a good
infrastructure in place. Moreover it has excellent
international logistics, including an airport, seaports
and other facilities, and strong support from the
government, including attractive taxation incentives,"
he said.
Singapore has designated a 35-hectare
Advanced Display Park in Tampines for its first tenant,
AFPD, which occupies close to nine hectares. It has so
far employed 500 employees with intentions to hire an
additional 200 by March. Singaporeans make up 80 percent
of its current workforce, which also includes 40
Japanese and 60 other foreign nationals.
However, what is more important, maintains Yeo,
is the ability for Singapore to attract skilled manpower
and have an efficient infrastructure and supporting
industry, including good Internet protocol (IP) support.
"Our universities and polytechnics have started display
modules with the intention of training engineers with
the latest display know-how. And EDB [the Economic
Development Board] intends to foster the growth of
supporting industries in electronics chemicals, color
filters, glass panels and other areas," he said.
In terms of supporting industries springing up
to support the advanced-display industry, several have
come on line in Singapore. NH Techno has invested in an
LCD glass plant and intends to start production shortly.
Kurita from Japan is running a water-treatment plant
next to AFPD, while another Japanese-based company,
Nagase, has intentions to invest in an electronics
chemical facility. Hitachi in the meantime has announced
intentions to begin production of drive chips for LCDs
at its wafer fabrication plant within the next six
months.
Although the electronics industry is
moving toward high gear and automation, Singapore is
still a good location for value-added manufacturing,
says R Ramakrishnam, managing director of Pearl
Precision, a plastic precision molding company based in
Malaysia.
"Due to its ideal infrastructure and
supporting industries that have clustered up over time
to support advanced flat panel display technology,
Singapore has been perceived to be the Asian leader in
high-technology manufacturing, while countries like
Malaysia and Thailand have still a long way to catch up
in this particular market niche," he said.
(©2002 Asia Times Online Co, Ltd. All rights
reserved. Please contact content@atimes.com
for information on our sales and syndication policies.)
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