Singapore places high-stake bet on semiconductor industry

Singapore is doubling down on the industry that sparked the global trade war, according to Bloomberg.

According to Singapore’s Economic Development Board (EDB), over the past decades, Singapore has quietly become a semiconductor powerhouse, accounting for 10% of the global chip production and about a fifth of the world’s chipmaking gear.

Singaporean Prime Minister Lawrence Wong in his budget speech last week said Singapore has attracted global artificial intelligence and quantum computing firms and he pledged to spend about SGD1 billion ($747 million) on a new chip-research facility.

Singapore already hosts plants for blue-chip U.S. manufacturers including memory-chip specialist Micron, outsource manufacturer GlobalFoundries, and fabrication-equipment supplier Applied Materials. Now it’s pushing harder into cutting edge research and manufacturing to keep up in the AI era.

However, it’s a path fraught with obstacles at the moment. Ever since the U.S. Justice Department indicted Chinese company Huawei in January 2019 during the first Trump administration, technology, and especially the chips at the heart of every device, has been central to the growing global trade conflict.

This year, the U.S. introduced an AI chip export rule designed to prevent countries such as China, Iran and Russia from accessing top-performing processing chips developed in the U.S. by companies like Nvidia.

The U.S. President Donald Trump has threatened 25% tariffs on semiconductor imports as early as April.

The added scrutiny around AI technology has already bubbled up in Singapore over the issue of whether the island was being used to transfer embargoed Nvidia chips to China, bypassing US export curbs.

As the fabric of global trade continues to unravel, the island’s semiconductor industry can only expect global scrutiny to increase, according to Bloomberg.