28 Apr 2008
NR/11/2008
New SPRING programme to strengthen Semiconductor capabilities
1. Singapore's Semiconductor industry received a boost today with the launch of the Semiconductor (Semicon) Capability Development Programme (CDP) by SPRING Singapore. This new programme will help local SMEs acquire new capabilities to meet the increasingly stringent outsourcing requirements of the industry.
2. The increasing prevalence of outsourcing in the global semiconductor industry, caused by the major equipment makers' strategy to build up a strong supply chain in Asia to achieve cost-competitiveness, presents great opportunities for SMEs. For Singapore to become a hub for manufacturing excellence, local SMEs need to innovate and enhance their competitiveness to ride on this outsourcing wave. SPRING Singapore will set aside $6 million under this new programme to develop and enhance the capabilities of local SMEs over the next three years. The Semicon CDP is expected to generate some $120 million in value-add for the industry from at least 25 projects within this period.
3. The Semicon CDP encourages local SMEs supporting the semiconductor industry to improve and develop new products, processes and services to better serve the industry. It also facilitates collaborative efforts amongst SMEs, as well as with their multinational corporation (MNC) partners to offer more complete solutions to meet the needs of the industry.
4. Mr Philip Yeo, Chairman of SPRING Singapore, announced this new Semicon CDP today during his visit to VDL Enabling Technologies Group (VDL-ETG) Singapore, a global contract manufacturer of semiconductor and other equipment. The company is the first to work with SPRING on a capability upgrading project under the Semicon CDP to impart their know-how and key expertise in process control and quality systems to 12 of their SME suppliers from the precision engineering industry. The objective is to improve the quality of their suppliers and their delivery lead-time to provide better support to their customers.
5. Mr Yeo urged local companies to upgrade their capabilities to create new value and sustain growth for themselves and Singapore's economy. "Our SMEs have benefited from the growth of the semiconductor industry. They produce key components, equipment and parts for the industry," said Mr Yeo. "With rapid pace of technology of this industry cluster and the increasing trend towards outsourcing, there are ample opportunities for our Precision Engineering and Machinery SMEs to tap and grow."
6. The capability upgrading project by VDL-ETG will be carried out in two phases, starting from January this year and ending June 2009:
• Phase One: Identifying the key capabilities for improvement and the required training facilitated by the Singapore Industrial Automation Association to upgrade suppliers' skills and knowledge. A total of 45 engineers and managers from the 12 suppliers are undergoing training in process and quality control concept.
• Phase Two: VDL-ETG will impart their knowledge and know-how in production, process control and quality systems to their suppliers through joint project implementation with grant support from SPRING.
7. With the new systems and know-how acquired through these projects, local SMEs will then be able to better support their customers in the semiconductor industry with improvements in product quality, sales forecasting capabilities, resource allocation, process control and traceability, and delivery lead-time. MNC customers such as VDL-ETG will in turn enjoy cost savings in manpower otherwise required to monitor suppliers' performance, as well as to generate, track and process each purchase order.
8. By helping its suppliers upgrade their capabilities, VDL-ETG aims to secure more business from their customers and in turn increase their outsourced volume to their local suppliers. The company spent $35 million last year outsourcing PE components and equipment parts to suppliers in Singapore and overseas. At the end of the project, it expects to improve the SME suppliers' on-time delivery rate from 85% to 95%, reduce delivery lead-time from an average of 10 weeks to six weeks, and reduce incoming rejection rate from more than 4% today to just 1%. With these new capabilities, the SMEs will be able to take on more jobs and consequently, broaden their customer base.
9. Techcom Technology Pte Ltd is one of the three suppliers that have embarked on Phase Two of the project with VDL-ETG. Its Director, Mr Mark Khoo, said that the capability upgrading programme will help them to enhance their infrastructure and streamline their internal processes. "The course we have attended has provided us with deeper knowledge of secondary processes such as treatment and surface finishing which we normally outsource. We believe the continuous support from SPRING and VDL-ETG will not only help us achieve our short-term targets, but also bring us closer to our long-term strategic goal of being equipped with state-of-the-art capabilities and expertise to better compete with the bigger foreign players in the future."
10. Speedy Industrial Supplies Pte Ltd also recognises the importance for local SMEs to upgrade themselves to take their business to the next level. "Our company is now able to take a bold step forward and invest in new technologies to take our business to a new level of excellence. Our people are excited by the opportunities given to them to enlarge and enhance their skill sets, and to keep abreast of the latest IT available in the market place," said Mr Wong Ghan, Managing Director of Speedy.
11. Mr Henk Jan Jonge Poerink, General Manager of VDL-ETG Singapore said, "This programme marks another important milestone on our partnership efforts with SPRING Singapore and our suppliers. It will improve the operational performance of VDL-ETG and our suppliers in the areas of quality, reliability and lean manufacturing. The programme also supports long-term developments in new manufacturing technologies and logistic IT systems which will help to ensure that VDL-ETG and our suppliers are better equipped for future growth and new demands in the semiconductor industry."
12. Enterprises interested in learning more about the Semiconductor CDP can contact SPRING Singapore on tel: 6898 1800 or email: enterpriseone@spring.gov.sg.
Factsheet On The Semiconductor Capability Development Programme
1. The Capability Development Programme (CDP) is an initiative by SPRING Singapore to enhance industry innovation and capability. This programme enables SMEs to move up the value chain and provide better support to their customers. This helps Singapore's SMEs to become more competitive in the global market.
2. The Semiconductor (Semicon) CDP is the fifth to be introduced, after CDPs for the Marine, Logistics, F&B and MedTech industries. Its objective is to help local SMEs move up the value chain and acquire new capabilities to meet the increasingly stringent outsourcing requirements of the industry.
3. The Semicon CDP helps precision engineering SMEs supporting the semiconductor industry to improve and develop new products, processes and services, facilitate strategic partnerships between SMEs and their partners to offer more complete solutions to meet the needs of the industry, and attain certification to internationally recognised standards.
4. This programme is for all local precision engineering SMEs that are keen to enhance their competitiveness in capturing opportunities in the semiconductor industry. The initiative should develop new capabilities and lead to significant contributions to the semiconductor industry.
5. Under the Semicon CDP, SPRING Singapore will provide grant support to defray a portion of the project's qualifying costs, which include manpower, equipment, materials and professional services. Support could be up to 50% for projects by individual SMEs and up to 70% for collaborative projects.