Singapore semiconductor sector could be hit by widening US curbs

But Republic's standing as resilient manufacturing hub unlikely to be dented

- Ovais Subhani

New US export restrictions on semiconductors are unlikely to mar Singapore's standing as a resilient manufacturing hub, but firms here could still take a hit from brewing trade tensions and technology competition.

Industry experts said the ever-expanding curbs could threaten the financial health of chipmakers and inadvertently endanger the fate of investments in Singapore as well.

Mr Ang Wee Seng, executive director of the Singapore Semiconductor Industry Association, said that while various stakeholders are still assessing the full impact of the latest round of US restrictions, it is clear the measures will add complexity to the industry's dynamics.

"For Singapore, our strength lies in a robust ecosystem, strategic location and strong government-industry collaboration, which continue to make it an attractive destination for semiconductor investments," he said. "These curbs underscore the importance of resilience and adaptability in the global semiconductor supply chain."

However, Mr Ang added: "The latest round of US export restrictions is expected to have significant ripple effects across the global semiconductor supply chain, particularly for semiconductor equipment makers."

The US Department of Commerce imposed new restrictions on Dec 2, effective immediately, targeting China's access to vital components for semiconductors and artificial intelligence (AI) technology. The rules expanded existing controls on China's ability to acquire chipmaking equipment made by US companies such as Applied Materials, KLA Corp and Lam Research.

These firms have a significant presence in Singapore, which contributes about 10 per cent of global semiconductor supply and produces about 20 per cent of global semiconductor equipment annually.

The chip industry contributes about 8 per cent to Singapore's gross domestic product and represents 10 per cent of jobs in the manufacturing sector.