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SCMP Reporter

The third-biggest microchip-maker, Chartered Semiconductor Manufacturing, has celebrated its return to profitability by announcing plans for a US$2.1 billion semi-conductor wafer fabrication plant in Singapore.

 The plant is the largest single investment in Singapore's electronics industry in recent years.

 It will create 1,000 new jobs at a time many in the industry are laying off.

 'This is good news for Singapore.

 'Singapore is moving up the value chain,' Warburg Dillon Read economist Cliff Tan said.

 Low-end, low-skill electronics operations such as disk-drive manufacturing have been on a steady, some say permanent, decline amid mounting competition from cheaper climes abroad.

 To compensate, the government has been cajoling local manufacturers to upgrade and shift to higher-yielding and more sophisticated electronics products where it feels Singapore can retain a competitive edge.

 Chartered's news highlights the vastly differing fortunes within Singapore's electronics industry.

 Disk-drive manufacturer Seagate Technologies this week announced plans to shut one of its four Singapore factories.

 It is holding talks with 2,000 workers over their fate, having already cut its workforce from 27,000 to 14,000.

 Western Digital also revealed this week it was exiting the hard-drive business after last year shifting its entire assembly operations and 3,000 jobs from Singapore to Malaysia.

  They follow Compaq Computer, Wearnes Peripherals, Phillips Electronics and Texas Instruments among those that have down-sized their Singapore operations.

 Liew Heng San, managing director of the Economic Development Board, said: 'Singapore remains an attractive location for capital-intensive and cutting edge, high-technology activities.'  Chartered's new wafer-fabrication foundry will be its sixth in Singapore and the country's 12th.

 Company president Barry Waite said: 'We are making solid steps in the right direction. We will continue to invest in technology, capacity and the right skills to enhance Chartered's role as a long-term, premier pure-play foundry.'  Chartered is 71.9 per cent owned by state-linked Singapore Technologies.

 In November, Chartered embarked on a dual-listing on the Singapore stock exchange and Nasdaq, becoming the first company to take advantage of the local exchange's new, more flexible, listing criteria for loss-making high-technology firms.

 It yesterday reported a fourth-quarter profit to December 31 of $22.1 million compared to a $77.2 million loss a year earlier.

 For the full year, the company narrowed its losses to $32.6 billion, from $190 million the previous year. Mr Waite forecast a return to full-year profit this year.

SINGAPORE 



Chartered Semiconductor US$2.1b plan is biggest electronics boost in years