Singapore will shut down next week, further complicating the semiconductor supply chain!

Stop work! Stop school! Stay at home!

For one month!

This is the latest move announced by Singapore Prime Minister Lee Hsien Loong

Effective Wednesday (April 8)

Singapore Prime Minister Lee Hsien Loong delivers a national address

Image source: International Online

Just now! Singapore issued the latest epidemic control ban

On April 3 , the Singapore Ministry of Health's inter-departmental anti-epidemic task force revealed that Singapore had 65 new confirmed cases of COVID-19 that day. Among them, 9 were imported cases, 39 were related to other infection clusters, and 17 were from unknown sources. As of now (April 3), Singapore has a total of 1,114 confirmed cases, including 25 critically ill patients.

As the epidemic continues to escalate, Singapore Prime Minister Lee Hsien Loong delivered a live speech to 5.7 million people across the island at 4 pm on April 3 regarding the COVID-19 outbreak. He pointed out that although the epidemic continues to be under control, due to the rapid increase in local cases, the source of infection cannot be found in nearly half of the cases, and the government has decided to take more decisive measures , which will last for one month.

All non-essential service workplaces are closed. From next Tuesday (April 7), all non-essential service workplaces in Singapore will be closed! Except for basic services such as banks, clinics, wet markets, supermarkets, hawker centers, restaurants and public transportation, other workplaces will be closed for one month.

Venues in Singapore that can continue to operate as normal

Calling on all residents to stay at home as much as possible. In his live speech, Lee Hsien Loong mentioned that all residents in Singapore should stay at home as much as possible; everyone (especially the elderly or weaker) should avoid social activities with people outside their families, gatherings should be limited to home, and avoid visiting other people's homes. Go out only when you have to, such as buying necessary food or engaging in essential services or working in key economic sectors.

Singapore has always been an industrial center and Asian bridgehead for the global semiconductor industry. With this ban, the semiconductor industry, one of the lifelines of Singapore's development, is particularly worrying.

Hub! Singapore plays a key role in the global semiconductor industry

The semiconductor industry is one of the two pillar industries of Singapore's electronics industry. Today, from IC design, chip manufacturing, to packaging and testing, Singapore's semiconductor industry has formed a mature industrial ecosystem, and almost all chip giants from all over the world have set up factories here. In the past few decades, global semiconductor giants have chosen to set up factories in Singapore, such as ST, Avago Technologies, MediaTek, Micron, and distribution giants Avnet and Future.

A review of well-known companies in Singapore’s semiconductor industry chain, source : Xinshiye

Specifically, in the wafer manufacturing sector, Singapore has the world's second largest wafer foundry, GlobalFoundries, UMC, SSMC, Micron, STMicroelectronics and other large factories; in the equipment sector, Singapore has large production bases such as ASM and KLA, and equipment manufacturers such as Keysight, Advantest, Teradyne, TEL, Screen, Formfactor, Lam Research, and Applied Material also have large regional headquarters in Singapore. In the packaging and testing sector, packaging and testing powerhouses such as STATS ChipPAC, ASE, Ardentec, Amkor, and ADI Test Plant (acquired by Changdian) all have factories in Singapore.

Singapore Industrial Production and Semiconductor Sales Data Table

Image source : Singapore Business Review

The tight industrial chain not only helps enterprises find their industrial positioning, but also accelerates the global integration of the industry. However, under the epidemic, once Singapore’s production suspension ban is issued, can these factories still operate normally? As a global semiconductor industry hub, once Singapore suspends production and work, its impact will not be underestimated.

Work stoppage! What is the impact on the global semiconductor industry?

As the epidemic continues to spread around the world, in addition to Singapore, Southeast Asian countries such as Malaysia and the Philippines are constantly improving the level of epidemic prevention and control. Malaysia, a giant in Southeast Asian wafer manufacturing and packaging and testing, has implemented a travel restriction order since March 18, prohibiting its citizens from leaving the country for two weeks, and its packaging and testing industry has been impacted to a certain extent. As a gathering place for major MLCC manufacturers, the Philippines will have a 30-day lockdown from March 15 to April 14, which will have a significant impact on the production and sales of major MLCC manufacturers such as Murata, Samsung, and Taiyo Yuden.

According to analysis by industry insiders, compared with Malaysia and the Philippines, once Singapore's semiconductor companies suspend production and operations, the impact on the entire industrial chain will be greater and the impact will be more widespread.

On the one hand, semiconductor companies in Malaysia and the Philippines have relatively low technological content and are mostly low-end manufacturers. Most of the products they produce are for their own use. Although the shutdown will have a certain impact on the local chain, it is generally limited. However, semiconductor companies in Singapore are mostly oriented to the entire industrial chain. Once the company stops production, the impact on the global industrial chain will inevitably be greater. On the other hand, the regional headquarters of several semiconductor companies are located in Singapore. Once Singapore is actually affected, the headquarters is likely to adjust its growth targets. Similar decisions may indirectly impact countries such as Malaysia, the Philippines, and Thailand. Singapore is an important link in the dominoes.

A senior person in Singapore's semiconductor manufacturing and equipment industry revealed to Xin Shiye that Singapore's UMC and Micron semiconductor factories will maintain normal production and operations for the time being , and most Singapore's semiconductor factories have not yet issued suspension notices.

Micron Factory in Singapore

Global Foundries, the world's second-largest foundry chipmaker, released its latest statement on the evening of April 3rd, saying, "The semiconductor manufacturing industry supports the world's most important technology needs, including medical, communications, infrastructure, and security. Semiconductor manufacturing has been designated as an essential service in Singapore and globally, and Global Foundries Singapore is exempt from this full month of closure. Our business and facilities will continue to operate, and our suppliers will also be designated as supporting industries."

GLOBALFOUNDRIES SINGAPORE FACTORY

However, even if major manufacturers can continue production and operation in the next month, they will still face many challenges. The industry veteran believes that the first major challenge facing enterprises is that during the epidemic, due to the closure of non-essential work service places and the country's call for reducing going out, the lives and work of some employees will inevitably be affected to a certain extent, which is likely to lead to a decrease in work efficiency and output.

The second biggest challenge comes from logistics. The biggest concern of local semiconductor factories in Singapore is logistics. If the logistics of semiconductor factories are supported by their own companies, it will not have much impact; but if they are supported by third-party logistics companies, there is a high probability of delays in delivery. This is a key issue that needs to be solved for semiconductor factories in Singapore that are still operating normally.

If Singaporean semiconductor companies have to stop production, it will inevitably have multiple impacts. First, corporate revenue will inevitably decline. Second, the global semiconductor industry may face supply shortages. Third, semiconductor factory delivery delays will occur one after another.

Source: Xinshiye