Singapore Government Press Release
Media Division, Ministry of Information and The Arts,
MITA Building, 140 Hill Street, 2^nd Storey, Singapore 179369
Tel: 837-9666

Good afternoon

Mr Arthur van der Poel

Chief Executive Officer, Philips Semiconductor

Dr F.C. Tseng

President, Taiwan Semiconductor Manufacturing Company (TSMC)

Mr Tony Lear

Chief Executive Officer, System on Silicon Manufacturing Company

(SSMC)

Ladies and Gentlemen,

 I am delighted to join all of you this afternoon for the official opening of SSMC�s new wafer fab.

In 1998, the Singapore economy went into a brief recession brought about by the regional crisis. Yet, despite the poor business sentiments, Philips Semiconductor and Taiwan Semiconductor Manufacturing Corporation (TSMC) announced a significant Joint investment that year. In fact, their S$1.7 billion investment in the SSMC (System on Silicon Manufacturing Co.) was made at the lowest point of the economic downturn. It registered a strong vote of confidence by these two global players in the long-term prospects of the worldwide semiconductor industry and in Singapore�s competitiveness.

According to Dataquest, the global semiconductor industry grew by more than 32%, from US$170 billion in 1999 to reach US$222 billion in year 2000. While sentiments this year are down, industry experts are confident of the prospects for the semiconductor industry will remain healthy in the medium and long term. They expect double-digit growth to resume after two to three years.

Philips Semiconductor is one of the top three semiconductor companies in Europe. TSMC is the world�s largest foundry. Because both companies took a long-term approach with respect to the growth of the industry, SSMC is well placed today to ride on the upswing in demand when the industry picks up again.

SSMC will add to the growth of the Singapore economy. Its economic contribution is in four main areas.

First, SSMC strengthens the wafer fab cluster in Singapore. SSMC recorded an industry milestone when it started production 15 months after construction work began. This, according to SSMC, was a world record for the industry and a major achievement for the company in an industry where time-to-market is crucial.

Second, SSMC brings advanced wafer fabrication process technologies and capabilities to Singapore. While the company is currently focussing on 0.25 micron (um) technology, it is also rapidly ramping up to 0.18 and 0.15 um technology.

Third, the company is helping to spawn other high value-adding economic activities. Supporting industries will benefit. All this strengthens Singapore�s wafer fab cluster and improves our competitiveness worldwide.

The fourth major contribution is the development of our manpower capability. About 150 engineers have been sent for intensive training at the Philips wafer fab facility in the Netherlands and at TSMC in Taiwan. Continuing capability development is important for the long-term development of the industry. By the second quarter of 2002 when operations are in full swing, SSMC will have created 1,000 new jobs, two thirds of them for professionals and technicians.

To support companies like Philips Semiconductor and TSMC, the Singapore Government will continue to invest heavily in infrastructure and capability development ahead of demand. Last month, I announced the development of the fourth wafer fab park in the North Coast area near Senoko. Today, I wish to highlight another two new initiatives on capability development.

These are the Postgraduate Manpower Programme (PMP) and the Research and Training Programme (RTP). They will ensure a greater availability in Singapore of manpower with postgraduate-level training. We will need more such highly trained technical manpower as our economy moves up the value ladder into knowledge-intensive activities.

The target of the Postgraduate Manpower Programme is to train 800 engineers with post-graduate degrees over the next three years, while the Research and Training Programme will train about 450 R&D engineers over the same period. This will create a sizable pool of additional engineering manpower for the industry to draw from.

Under the Postgraduate Manpower Programme, EDB will encourage companies to sponsor students for full-time Master of Engineering, Master of Science and PhD degrees at the National University of Singapore and the Nanyang Technological University. Manpower training grants will be provided to these companies to reduce their cost of sponsorship. The trainees will join the sponsor-companies upon graduation.

The Research and Training Programme makes use of NSTB�s research institutes and the research centres of NUS and NTU to train additional manpower for industry R&D. University graduates will be recruited as interns for up to 12 months of on-the-job R&D training in any of these research institutes and centres. The interns will be deployed to work in industry after completing their attachment.

Both the Postgraduate Manpower Programme and Research and Training Programme will train manpower for various industry clusters including the semiconductor industry. Together with other existing manpower training programmes, EDB hopes to train more than 2,000 semiconductor-related engineers over the next three years. This demonstrates our commitment to develop human capability ahead of demand which is one reason why Philip Semiconductor and TSMC have invested in Singapore.

We in Singapore are delighted by this strong vote of confidence from two of the world�s leading semiconductor players. We assure Philip Semiconductor and TSMC of our continued support.

My warmest congratulations to the owners, managers and staff of SSMC on the official opening of this wafer fab. I wish all of you great success.