Spore chipmakers see AI, talent hunt as bigger challenges amid tariff threat

Firms deepening innovation tie-ups, tapping local grads to boost industry

- Ovais Subhani

Singapore's semiconductor industry will continue to invest and innovate to address the growing demand for more efficient chips, despite threats of new trade barriers that can further disrupt its highly globalised supply chain.

The more pressing challenges for chipmakers and companies in related businesses – both multinational and local – are the hunt for talent, and the race to innovate and stay competitive and relevant in the era of artificial intelligence (AI).

To be sure, chip companies at the three-day Semicon South-east Asia 2025 event in Singapore, held from May 20 to 22, were unanimous in their view that, despite its solid growth prospects, the industry will not be immune to a global economic slowdown induced by the current trade policy uncertainty and any new tariffs that would affect consumer demand for electronic goods.

While making its supply chains more adaptable to geopolitical demand and supply vulnerabilities remains an uphill task, the industry has so far successfully weathered intensifying trade tensions and technology competition between the world's two largest economies – the US and China – since 2017.

In the same period, global chip sales have increased at a record pace and are expected to cross the US$1 trillion (S$1.28 trillion) mark by the early 2030s from around US$627 billion in 2024.

More recently, chip revenues are getting an additional uplift from the fast-growing cloud capacity, with new data centres popping up worldwide to handle the immense computational and data storage demands of AI applications.

The industry, however, sees the AI opportunity as a challenge as well.

Referring to AI, Mr Tim Breen, chief executive officer of chipmaker GlobalFoundries, said at the Semicon event: "There is, of course, optimism across the board, but within that is a question – Are we ready? Are we ready for that growth?