Singapore’s Prime Minister Lawrence Wong announced a land reclamation project to support advanced manufacturing, including chipmaking. The city-state already produces one in ten of the world’s semiconductors and a fifth of the machinery that makes them. Vision Power Semiconductor Manufacturing Company (VSMC), a joint venture between Taiwan’s Vanguard and Dutch chipmaker NXP, opened a $7.8bn plant.

VSMC chair Leuh Fang said the company is considering a second plant to meet demand. The global AI boom has boosted Singapore’s chip industry, with electronics exports surging 132 per cent in August. Between 2022 and 2025, Singapore attracted over $23.5bn in semiconductor investments.

Companies like Micron, Infineon, Siltronic, UMC, and Applied Materials have set up fabrication plants. However, geopolitical risks are rising. The US is investigating Singapore for alleged structural excess manufacturing capacity, which could lead to tariffs.

Singapore must balance compliance with US export controls while maintaining economic ties with China.