French semiconductor materials supplier Soitec broke ground on the construction of a €400 million ($571 million) extension of its wafer fabrication plant in Singapore on Friday.

The extension will double annual production of energy-efficient wafers to two million at the Pasir Ris Wafer Fab Park and double Soitec's Singapore workforce to more than 600 by 2026.

The extension spread over 45,000 sq m will be completed in 2024.

Soitec Chief Executive Pierre Barnabe said the project is in response to strong demand for 300mm silicon-on-insulator (SOI) wafers, used in 5G communication devices, including smartphones and electric vehicles.

The expansion here is part of a five-year, €1.1 billion capital expenditure programme that includes increasing output in Bernin, France. The company aims to boost its global annual production capacity to around 4.5 million wafers by 2026.

“The expansion of our production sites both in France and Singapore will bolster our global presence, attract talent, drive value and expand our contribution to energy savings,” Mr Barnabe said at the ceremony at the Pasir Ris plant.

Minister of State for Trade and Industry Low Yen Ling said at the event that the expansion will eventually increase Singapore's share of Soitec's global manufacturing output to more than two-thirds, up from half now.

“Amidst the intense competition for investments and softening near-term demand in the semiconductor industry, Soitec's decision to expand its operations here is particularly significant,” she said, referring to incentives announced by the United States and the European Union for the industry, and China's plan to produce more microchips at home.

“It signals the company's strong confidence in Singapore and long-term commitment to building its presence here and in the region.”

Soitec's new investment in Singapore follows expansion plans by global peers such as Micron Technology, GlobalFoundries and Siltronic here. Experts believe these investments show that Singapore - the world's fourth-largest chip supplier - will continue to be a major hub for the industry.

Ms Low said: “While the external demand outlook has softened in recent months, the industry's longer-term growth trajectory remains strong.”

Worldwide sales of semiconductors dropped in the July to September period by 6.3 per cent, the first quarterly decline in about three years, according to the Washington-based Semiconductor Industry Association.

But mega trends such as artificial intelligence, 5G and the Internet of Things are set to propel the global chip industry past US$1 trillion (S$1.35 trillion) in market value by the end of this decade, double the size of today's market.

“Singapore is well positioned to capture these growth opportunities,” Ms Low said.

Also present at the event were France's Ambassador to Singapore Minh-di Tang, Economic Development Board Managing Director Jacqueline Poh and JTC Corporation Assistant Chief Executive Alvin Tan. JTC runs the Pasir Ris Wafer Fab Park.

 

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