S'pore semicon players gear for 'positive' 2009

In the midst of a challenging 2008, seven in 10 semiconductor companies expect to report higher revenues next year, findings of a recent survey show.
Written by Vivian Yeo, Contributor

SINGAPORE--The semiconductor industry in Singapore is upbeat about the year ahead, according to findings of a new survey by local industry association Midas.

Nearly seven in 10 respondents indicated they were confident of higher revenues in 2009, the industry body reported Thursday. The participants--all Midas members--numbered about 40 and came from companies that represented the majority of semiconductor players in Singapore.

Ulf Schneider, president of Midas and vice president at Infineon Technologies Asia-Pacific, said Tuesday that the industry "gave a very positive outlook" for the year ahead. Speaking at the Midas-organized Semicon Summit 2008, he said the industry is looking to a year of further growth and development--with a lot of energy" abound in the market.

The sector's show of confidence comes just weeks after Singapore's Ministry of Trade and Industry released an economic report that, among other forecasts, predicted demand for semiconductors will be weak during the second half of the year.

In the report, the MTI noted that the electronics manufacturing cluster was stagnant during the second quarter of this year, growing at 0.2 percent due to weak global demand.

To ride out the "volatile market", Zainudin Nordin, a member of parliament and mayor of the Central Singapore district, urged semiconductor industry players to "relook strategy of cooperation".

Economies such as China and India, the mayor pointed out, are fast developing capabilities in areas including integrated circuits design, and are creating an eco-system where companies start to come together to create markets for new devices.

Singapore has a lot to learn from other established players in the region too. "Very often, when we compare ourselves to Taiwan [and] South Korea, there are a lot of things we can improve on," he said.

Opportunities in electronics contract manufacturing
Electronics contract manufacturing is a growing area and presents opportunities for the Asia-Pacific region, said Sanjay Singh, vice president for Asia-Pacific at Frost & Sullivan.

According to Singh, the electronics contract manufacturing industry was worth about US$300 billion in 2007, of which about US$27 billion was generated out of Southeast Asia. The region's contribution--a 20 percent increase over 2006--will continue to grow over the next three to five years, he noted, although not at the same pace as last year.

Among the reasons for the growth of this market is the increasing momentum of OEMs (original equipment manufacturers) outsourcing activities and products, as well as the demand for electronics in a diverse portfolio of products.

Niche segments such as medical equipment, should provide electronics manufacturing services players with healthy margins, said Singh.

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