Silicon Box, a semiconductor design and device integration services startup, unveiled its new US$2 billion (S$2.65 billion) factory in Singapore on Thursday.

The 73,000 sq m facility in Tampines is designed to manufacture semiconductor chiplet interconnections that can be applied in areas such as artificial intelligence, electric vehicles and wearables.

According to Singapore-based Silicon Box, the factory will create up to 1,200 roles ranging from engineers to digital experts.

It will also provide upskilling opportunities, with support from the Economic Development Board (EDB).

Chief Executive and Co-Founder Han Byung Joon said on Thursday that the startup built its factory here because of Singapore’s reputation as a global innovation hub and its skilled workforce. 

Dr Han added that Singapore’s strong governance was a crucial factor in choosing the city state as a location for its factory.

“With my experience, I know which country is working in terms of talent and the ease of doing business. I will say that Singapore has a very efficient government,” he said.

Founded in 2021, Silicon Box’s proprietary chiplet-to-chiplet interconnection technology connects chiplets such that its clients can design flexibly with higher performance and lower energy consumption.

Chiplets are small components with unique functionalities that can be built into larger semiconductor chips.

Silicon Box has raised US$208 million across its seed, Series A and Simple Agreement for Future Equity funding rounds. 

The investments came from various sources, including family offices, an initial round half funded by Silicon Box’s three co-founders themselves, and venture capital firms such as BRV Capital Management and Ignite Innovation Fund. Its Series B funding is ongoing.

Silicon Box’s decision to set up its first manufacturing and research and development facility is a testament to the country’s competitiveness as a critical global node for semiconductors, said EDB Chairman Png Cheong Boon.

Mr Png said at the opening ceremony: “Over the years, we have built up leading positions in several manufacturing sectors, including semiconductors. The semiconductor industry contributes to more than 7 per cent (of) our GDP, and is Singapore’s largest manufacturing sector.”

He added: “Despite near-term headwinds arising from factors such as high interest rates and continued inflationary pressures, the long-term trajectory of the semiconductor industry remains very strong.”

Singapore accounts for 11 per cent of the global semiconductor market share, and approximately 20 per cent of global semiconductor equipment is manufactured in the city-state.

Worldwide chip sales declined 21.6 per cent year on year in April 2023, while the latest industry forecast projects an annual downturn of 10.3 per cent in 2023, followed by an increase of 11.9 per cent in 2024, according to the Washington-based Semiconductor Industry Association.

But the global chip industry is set to surge past US$1 trillion in market value by the end of this decade, double the size of today’s market.

Silicon Box’s new headquarters follows expansion plans in Singapore by its global peers. 

In July 2022, French semiconductor materials supplier Soitec announced that it would invest $593 million to double the capacity of its wafer fabrication plant in Singapore.

In December, American semiconductor equipment maker Applied Materials announced that it would build a $600 million plant in Tampines that would expand its manufacturing and research operations, and create 1,000 new jobs.

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