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Did Mr Chan Chun Sing mention which section of the manufacturing sector that they aim to grow b 50% over 10 years? Is it pharma? biomedical? or semicon?

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Did Mr Chan Chun Sing mention which section of the manufacturing sector that they aim to grow b 50% over 10 years? Is it pharma? biomedical? or semicon?

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Well done , definitely more extensive coverage with details included on how semiconductor (as part of manufacturing industry) is performing on the three indicators of the Economy . Can the group find out what is the share of the semiconductor sector in the manufacturing industry hence what would be the corresponding contribution to the employment scene ? Did Mr Chan Chun Sing mention which specific section of the manufacturing industry which the govt is saying to growing by 50% over 10 years? Pharma? Biomed? Semi? These are likely questions which I will be asking during presentation should the group mention these facts> I am interested to know. The group gets an A for Macro padlet

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Well done , definitely more extensive coverage with details included on how semiconductor (as part of manufacturing industry) is performing on the three indicators of the Economy . Can the group find out what is the share of the semiconductor sector in the manufacturing industry hence what would be the corresponding contribution to the employment scene ? Did Mr Chan Chun Sing mention which specific section of the manufacturing industry which the govt is saying to growing by 50% over 10 years? Pharma? Biomed? Semi? These are likely questions which I will be asking during presentation should the group mention these facts> I am interested to know. The group gets an A for Macro padlet

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Declining Retrenchment Rate from 3Q2020 to 3Q2021

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Labour Turnover Rates for Resignation and Recruitment

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Labour Turnover graph from Q32020 to Q32021

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Retrenchment in 2021 from Q1 to Q3 (Q4 Not Available at 25th December 2021)

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Seasonally adjusted unemployment rates from 1996 to Q32021

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GDP additional references

1. https://asia.nikkei.com/Economy/Singapore-expects-3-5-growth-in-2022-amid-uneven-COVID-rebound

2. https://www.statista.com/statistics/1122999/singapore-nominal-gdp-breakdown-by-sector/

3. https://www.mti.gov.sg/Newsroom/Press-Releases/2021/11/MTI-Forecasts-GDP-Growth-of-around-7_0-Per-Cent-in-2021-and-3_0-to-5_0-Per-Cent-in-2022

Inflation additional references

1. https://tradingeconomics.com/singapore/producer-prices-change

2. https://tradingeconomics.com/singapore/inflation-cpi

3. https://news.cgtn.com/news/2021-08-23/VHJhbnNjcmlwdDU3ODUy/index.html

4. https://www.investopedia.com/ask/answers/111314/what-causes-inflation-and-does-anyone-gain-it.asp

Employment additional references

1. https://stats.mom.gov.sg/Pages/Monthly-Unemployment-Situation-Aug21.aspx

2. https://www.channelnewsasia.com/singapore/jobs-unemployment-mom-labour-market-manpower-q3-2021-2380411#:~:text=2.3%20per%20cent.-,Advertisement,0.9%20per%20cent%20in%20June.

3. https://www.channelnewsasia.com/singapore/singapore-grow-manufacturing-sector-50-percent-2030-430871

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Thomas, J. (2021, August 26). Graphics cards could get even more expensive next year, here's why. TechRadar. Retrieved January 2, 2022, from https://www.techradar.com/sg/news/graphics-cards-could-get-even-more-expensive-next-year-heres-why

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Unless you've been living under a rock, you've probably noticed that most computing products like graphics cards and processors are more expensive than ever. And, well, they could be getting more expensive soon, as TSMC may be rising its semiconductor prices.

According to the Wall Street Journal, TSMC (Taiwan Semiconductor Manufacturing Company) is looking to raise prices by as much as 20% in order to offset the huge spike in demand for chips. And while PC gamers are feeling it because it's hard to buy a graphics card, this global silicon shortage is affecting everything from the iPad to automotive manufacturing.

Right now, it remains to be see exactly how much the prices for TSMC's product will go up, but according to WSJ's sources, prices would go up 10% for its most advanced chips and 20% for chips using older technologies. Luckily, graphics cards and desktop processors are usually using the cutting edge manufacturing processes, so should be somewhere on the lower end of the scale.

We also don't know whether or not manufacturers will pass on these costs to consumers, but it's probably safe to assume they will. As for how much prices will go up on store shelves, it remains to be seen, but it's not like graphics cards are exactly affordable right now either way.

Analysis: muddying the waters

Because of the hardware shortage we're going through right now, pricing is just kind of all over the place, even before taking this news into consideration. While we praised the Nvidia GeForce RTX 3080 for not being more expensive than the RTX 2080 when it launched, it didn't take long for resellers to make Nvidia's reasonable MSRP seem like a pipe dream.

Now that the Nvidia GeForce RTX 3080 has been out for nearly a year, you'd be hard pressed to find any version of the graphics card that sells for the $699 that Nvidia quoted when it launched the GPU back in September 2020. Most third-party graphics card manufacturers have raised their prices, and they're still selling out the second they become available.

Now, Nvidia won't necessarily be affected by TSMC's price increases, as Team Green has been using Samsung's 8nm process for its Nvidia Ampere graphics cards, but it will absolutely affect AMD Radeon cards going forward. And, it's also completely possible that Samsung will also raise the prices for its semiconductors, as well.

So while it might be nice to think that graphics card prices won't go up too much in response to the increased cost of semiconductors, we wouldn't be surprised if they did - most graphics cards have already gone up in price, and it's not like AMD or Nvidia are having any problem selling through all of their stock.

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Graphics cards could get even more expensive next year, here's why

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Unless you've been living under a rock, you've probably noticed that most computing products like graphics cards and processors are more expensive than ever. And, well, they could be getting more expensive soon, as TSMC may be rising its semiconductor prices.

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Ang, P. (2021, November 23). Singapore overall inflation rises to 3.2% in October, highest in more than 8 years. The Straits Times. Retrieved January 2, 2022, from https://www.straitstimes.com/business/economy/singapore-overall-inflation-rises-to-32-in-october-highest-in-more-than-8-years

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Singapore overall inflation rises to 3.2% in October, highest in more than 8 years

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Core inflation, which better captures the underlying trend in consumer prices, rose to 1.5% last month, highest in nearly three years. . Read more at straitstimes.com.

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Government, S. (2020). Singapore economy. Base. Retrieved December 31, 2021, from https://www.singstat.gov.sg/modules/infographics/economy

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An animated overview of the Singapore economy, presenting the latest GDP, growth and industry breakdown, latest data and partners in investments in Singapore and abroad, profile of enterprises, and latest data and partners in trade in goods and services. This infographic is based on data compiled by the Department of Statistics, other government agencies and statutory boards.

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Labour Market Report 2021

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MACROECONOMIC PRELIMINARY ANALYSIS

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Manpower, M. of. (2021, December 15). 1215 labour market report third quarter 2021. Ministry of Manpower Singapore. Retrieved December 25, 2021, from https://www.mom.gov.sg/newsroom/press-releases/2021/1215-labour-market-report-third-quarter-2021

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1215 Labour Market Report Third Quarter 2021

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Overview1. Singapore’s labour market performed better in 3Q 2021 compared to the previous quarter. Resident employment grew at a faster pace, although total employment declined due to a continued fall in non-resident employment. There was an...

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The analysis of demand and supply can be deepened to explain on the impact of equilibrium price and equilibrium quantity? At the end of the day, consumers and suppliers are all interested to know the impact on market prices and hot it will affect them.  So at the backdrop of rising demand but falling supply will this lead to eqm price rising? Believe this is mentioned in the article. In addition, there is nothing much mentioned on market structure of the semiconductor industry? Actually dont see it anywhere. How about price elasticity of demand? Believe they are price inelastic due to necessity and lack of substitutes. 

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The analysis of demand and supply can be deepened to explain on the impact of equilibrium price and equilibrium quantity? At the end of the day, consumers and suppliers are all interested to know the impact on market prices and hot it will affect them.  So at the backdrop of rising demand but falling supply will this lead to eqm price rising? Believe this is mentioned in the article. In addition, there is nothing much mentioned on market structure of the semiconductor industry? Actually dont see it anywhere. How about price elasticity of demand? Believe they are price inelastic due to necessity and lack of substitutes. 

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Overall there could be more in depth analysis and the breadth of concepts applied should be stretched beyond market demand and supply only. I will give the group a B+ grade for this MIEC padlet

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Macroeconomics Prelim Analysis [Based on 5 sources of information]

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Macroeconomics Prelim Analysis [Based on 5 sources of information]

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1. Gross Domestic Product (GDP) (Kieran & Joshua)

Singapore’s Economic Situation

During the third quarter of 2021, the Singapore economy grew by 7.1% on a year by year basis. On a quarterly and seasonally adjusted basis, the economy had expanded by 1.3% in Q3. A turnaround

In 2022, GDP growth in the region is expected to have a faster growth as countries progressively resume more economic activities. Aside from this the supply bottlenecks and disruptions might continue to weight down production.

Despite sustained improvements in labour productivity, it is very likely that production will be weighted down by the supply bottlenecks in early 2022.

There are currently 4 main risks in the economy at the moment:

1. With the growing concerns of the waning efficacy of vaccines and the potential mutations of the virus. Economies with high vaccination rates are still at risk as infections could still rise and weaken the economies recovery.

2. Supply could continue to be disrupted with COVID-19 outbreaks and lead to production being constrained for longer periods of times.

3. Disrupted supply chains and a increase in demand could lead to more persistent inflation which could trigger a global tightening of financial conditions.

4. Continued uncertainty involving major economies could weight on trade and the recovery of the economy.

Main current benefit in manufacturing is the growth prospects as it is expected to remain strong given the current robust demand. Manufacturing is also expected to continue to expand with growth in electronics and precision engineering clusters supported by sustained demand for semiconductors and semiconductor equipment respectively. With the healthy demand of IT and Digital solutions it is expected to drive the expansion for Info-comm, finance and insurance.

With these factors our economy is expected to grow 3.0 to 5.0% in 2022

Manufacturing Sector’s economic situation in Singapore’s economy

The manufacturing sector grew by 7.2 per cent year-on-year, moderating from the 17.9 per cent growth in the preceding quarter. All clusters within the sector, except for the biomedical manufacturing cluster, expanded during the quarter. In particular, the electronics and precision engineering clusters continued to post healthy growth amidst robust global demand for semiconductors and semiconductor equipment respectively. On a quarter-on-quarter seasonally-adjusted basis, the manufacturing sector shrank marginally by 0.1 per cent, easing from the 2.2 per cent contraction in the second quarter.

Due to the pandemic, Singapore is still living with many restrictions, resulting in many people staying home and needing electronics for online working or schooling, producing a constant demand for semiconductors and semiconductor equipment. These restrictions allow the manufacturing sector, especially electronics to flourish.

Significance of Manufacturing Sector to Singapore's GDP

The Manufacturing Sector had a total contribution of 21.5% to 2020’s real GDP. This is very significant considering it has the highest percentage of the sectors and the next sectors with the highest percentage contribution is Wholesale Trade at 16.8% and Finance and Insurance at 15.7%.

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2. Inflation (Pearlyn & Jordon)

General Inflation Situation in Singapore

Singapore saw the highest inflation rate in 8 years during October 2021 (up 3.2%), mainly due to high car prices and higher accommodation costs. The October core inflation rate, which excludes the factors previously mentioned, rose to its highest in 3 years (up1.5%).

Transportation inflation rate rose to 14.3% from 10.8%, and housing costs rose 2.5%.

The main reasons for the rise in core inflation include higher labour costs due to disruptions in the supply of manpower, mainly due to dormitory lockdowns and limited entry of foreign workers in order to prevent further spread of Covid-19. It is also due to imported inflation resulting from supply chain disruptions worldwide leading to mismatch in geographical demand and supply (for example the shortage of shipping containers in the right places). Higher crude oil prices also resulted in escalating shipping costs. Imported inflation is evident in higher food and consumer goods prices and higher raw material costs that is required for manufacturing.

Service costs increased to 1.6% in October from 1.2% in September, largely due to the establishment of the Vaccinated Travel Lane (VTL), which inflated the air travel prices as well as hotel accommodation rates.

Electricity and gas prices saw a decrease in inflation from 9.9% to 7.8% which can be attributed to the minimal increases in tariffs in 2020.

Overview of Singapore’s Current Core Inflation

MAS core inflation rose to 1.1% year-on-year in the third quarter. This is due to a significant increase in the 11 externally-led elements of the CPI (see Graph 3.11). Electricity and gas costs, in particular, rose sharply as global oil prices were above pre-pandemic levels (Q4 2019). At the same time, rising prices for imported foods following the acceleration of global food inflation in the previous quarter led to higher inflation rates for undercooked foods. Domestically, rising labour costs may be reflected in some consumer service prices, capturing domestic inflation factors.

Inflation rates for CPIAll items rose from 2.3% in the second quarter to 2.5% in the third quarter due to rising core inflation and significant increases in accommodation costs (see Graph 3.12). In addition, rents for all types of apartments continued to grow, pushing housing inflation in the third quarter from 0.9% in the second quarter to 1.7%. Meanwhile, gasoline costs rose as global oil prices rose further in the third quarter, but these were offset by the slowdown in car price growth and car tax cuts introduced in August.

Impact on Relevant Industries

The Domestic Supply Price Index (DSPI) which indicates prices changes in locally manufactured goods and imports that are consumed locally rose 26% in November 2021, as compared to November 2020.

In particular, the price rates of manufactured goods increased to 14.3%, and that of machinery and transport rose to 12%, as compared to the previous month. This has a significant impact on all industries in Singapore, and the electronics industry is not spared.

Semiconductor prices have increased significantly in the past one year, due to many global factors. This includes:

1. High demand. More people are purchasing electronics such as laptops, phones, printers, etc. especially due to the pandemic, which has forced millions to work or study from their homes. This means that they would require more electronic gadgets than before to better perform their duties from home.

2. The logistics supply chains that were disrupted by Covid-19 has resulted in higher raw material costs for semiconductor manufacturers. This forces foundries to increase their prices in order to cope with the higher manufacturing costs.

3. The scramble by electronic manufacturers to secure supplies of semiconductors from foundries have also caused demand driven price hikes for all kinds of chips as all modern electronic gadgets and vehicles need semiconductors to operate.

Chip Manufacturers in Singapore

The semiconductor industry in Singapore has at least 13 major foundries and its combined production capacity makes up about 11% of the global market share.

GlobalFoundries, one of the world's largest chip foundries manufactures about 40% of its semiconductors in Singapore alone, and is looking to invest even more into building new production facilities here. This demonstrates Singapore's leading position in the world as a semiconductor manufacturer.

Semiconductor manufacturing is one of the pillars of Singapore's electronic industry. Despite lockdowns, production at these foundries were still ongoing with social distancing measures in place at almost full capacity.

While there are many negative impacts from inflation, it can, in some instances benefit the profit margins of manufacturers. Companies that have the power to price their products can improve their profit margins in the face of growing demand.

Generally, semiconductor companies, due to the high barriers of entry, have strong pricing power. The global drastic shortage of chips allow them to increase their prices as well as profit margins.

R&D Cost for Semiconductors

In 2020, ASMLs research and development (R&D) investments totalled 2.2 billion Euros which is a significant increase from 1.97 billion Euros in 2019.

Example of consumer products affected by semiconductor shortage

Graphic Cards

Prices of graphic cards have been a sore subject over 2020 due to a tragic mix of hardware shortages and an overwhelming demand leading to massive inflation. China’s recent crackdown on Cryptomining operations resulted in ex-mining GPUs flooding back into the market with consumers anticipating prices of hardware drop to a more affordable level. However, a recent market analysis suggests otherwise.

Reports state that the supply of Nvidia RTX 30 series GPUs is to drop by 30% while the 3060, in particular, suffers from a 50% reduction in expected availability. Moreover, prices are rising for about every GPU on the market even older GPUs from 2 generations ago such as the Nvidia GTX 1050Ti.

Prices are expected to become even more expensive as Taiwan Semiconductor Manufacturing Company(TSMC) may be rising its semiconductor prices. According to Wall Street Journal(WSJ), TSMC is looking to raise prices up to 20% in order to offset the huge spike in demand for chips. Furthermore, while PC players feel the shortage due to the limited availability of GPUs, this global silicon shortage affects everything from the iPad to automotive(Tesla, E-cars etc) manufacturing.

In the chart below, we can see that from 2020 Q1 2020 to Q1 2021 the average selling price (ASP) of GPUs of all ranges of products has tremendously inflated. In Q1 2021, the average price of a high-end GPU was US$1,358, almost double the average price in Q1 2020. Low-end, mid-range and workstation GPUs have all seen a spike in their prices as well.

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3. Employment (Jordon)

Overview of Singapore's Labour Market

Employment & Unemployment rates

In 2021 Q3, the market saw a much smaller decrease of -2,400 excluding Migrant Domestic Workers (MDW) than the previous quarter, with a significant decline of -16,300. Resident employment increased by 19,100 while non-resident employment fell by -21.500.

As of 15 December 2021, Singapore's resident unemployment rate stands at 3.5% while citizen employment is 3.7%. The long-term resident unemployment rate rose by 1.2% in September 2021 from 0.9% in June 2021. Moreover, Seasonally adjusted unemployment rates declined from July 2021 to August 2021 (Overall unemployment rate: 2.8% to 2.7%).

Increases of resident employment were led by outward-orientated sectors of Information & Communications, Professional Services, Financial Services along with domestically-orientated sectors like Health & Social Services. Though, growth of resident employment in consumer and tourism related sectors continue to trail behind others. The ongoing border restrictions contribute to the increased contraction of non-resident employment across most industries

Retrenchment
As seen from the graph below (left), we can infer that ever since COVID-19 in 2020 there has been a major spike in retrenched workers [From 10.69 in 2019 to 26.11 in 2020 (in 1,000s)]. On the other graph (middle), it is seen that the number of retrenchments declined in Q3 2021 from 2,340 to 1900 retrenched per 1,000 employees. Furthermore, the six-month re-entry among retrenched residents improved in Q3 2021 from 64% to 66%, back to the rate seen in Q1 2021.

Notably, additional data shows that fewer employees were placed on short work-week or temporary layoffs in 3Q 2021 (4,060) compared to 2Q 2021 (5,580), with numbers even maintaining above pre-pandemic levels. More particularly, there was a significant decrease in retrenchment in the Air Transport & Supporting Services because firms ramped up capacity in anticipation of resumption in air travel.

Labour Turnover

From 2Q 2021 to 3Q 2021, there was a continued recruitment rate increase from 1.9% to 2% (Seasonally adjusted), while resignation rates remained steady at 1.6% throughout Q1 to Q3 in 2021. Both rates were slightly under pre-COVID levels.

Turnover trends were mixed for occupations and industries. PMETs assembled a larger share of their workforces, such as Financial Services, Professional Services and Health & Social Services, which observed an increase in both resignation and recruitment rates. On the other hand, there was a decline in different sectors, e.g. Retail Trade, F&B Services.

The PMETs saw an upsurge in both recruitment and resignation rates, Echoing the industry trends. Moreover, the rates were more elevated than the quarterly average of pre-COVID periods. Thanks to the heightened movement of PMETs between employment has signalled improving confidence in the labour market. On the contrary, In 2Q 2021, non-PMETs observed lower recruitment and resignation rates.

Labour market overview in the Manufacturing industry (C26: Electronics, Computer & Optical Products)

Labour Turnover for Manufacturing Sector C26

A more in-depth analysis shows that the turnover rate for Electronic, Computer & Optical Products (C26) for the average monthly recruitment rate by industry and occupational group rose from 0.9% (2020) to 1.9% (2021).

Adding on, the turnover rate for the average monthly resignation for C26 from Q2 2020 to Q3 2021 increased from 1.3% to 1.8%, respectively.

Lastly, if we break down the average monthly recruitment rate and resignation rate, we can see that (All in C26 only):

1. Professionals, Managers, Executives & Technicians have a recruitment rate of 1.6% and a resignation rate of 1.5%.

2. Clerical, Sales & Service Workers have a recruitment rate of 2.1% and a resignation rate of 1.1%.

3. Production & Transport Operators, Cleaners & Labourers have a recruitment rate of 2.4% and a resignation rate of 2.3%.

Annual Employment Change for the Manufacturing sector

Total Annual Employment change for the year 2019 was 69.7, while in 2020 when the pandemic hit, it dropped to an all-time low of -181 which is the lowest it has been in 10 years. Zooming into the data, the Annual Employment Change for the manufacturing sector (foreign and local combined) dropped drastically from -2.1% (2019) to -37.8% (2020).

Job Vacancy Overview and for Manufacturing sector C26

In September 2021, the number of job vacancies (seasonally adjusted) trended higher to 98,700 while businesses continued to reconstruct their workforces amid inflating demand.

Along with the plunge in unemployed individuals, the ratio of job vacancies to unemployed persons rose, from 163 job openings per 100 unemployed persons in June 2021 to 201 in September 2021 (Seasonally adjusted).

Due to the ongoing border restrictions, there were manpower shortages in the Manufacturing and Construction sectors. Moreover, since the incremental ease of travel and dining regulations, there has been an emerging demand from the F&B Services, Air Transport & Supporting Services and Retail and Trade sectors.

The manufacturing sector has also seen a substantial decrease in Work Permit Holders and other sectors such as Construction, F&B Services and administrative and support services, accounting for 38% of all job vacancies.

The table on the right indicates that the Job Vacancy rate grew drastically from 1.6% in September 2020 to 5.3% in September 2021. Furthermore, the table also displays the different Job Vacancy rates by industry and occupation as follows:

1. Professionals, Managers, Executives & Technicians have a Vacancy rate of 5.2%.

2. Clerical, Sales & Service Workers have a Vacancy rate of 4.4%.

3. Production & Transport Operators, Cleaners & Labourers have a Vacancy rate of 5.8%.

Improving Employment in C26 of Manufacturing Sector (In 1,000s)

According to the latest data, Manufacturing Sector C26 underwent a declining rate of -0.6 in Q3 of 2021. However, from Q1 2021 to Q3 2021, we can see a substantial advancement from -2.8 to -0.6, meaning that fewer employees are getting retrenched, and the number of hired workers are gradually rising.

Notably, from Q4 2020 to Q1 2021, the employment rate worsened from -1.6 to -1.8 but then rose again to -1.6 in 2Q 2021. In Addition, the Total Employment Level in Q3 2021 for Manufacturing Sector C26 was 78.9.

Conclusion for Employment

The labour market situation in the Manufacturing industry has taken a brutal hit from the pandemic, as seen from the very low Annual Employment Change of -37.8%. Moreover, when we zoom into Sector C26, it is regarded that Job Vacancies dropped despite the pandemic in Q3 2020 (1.6%) but drastically rose in Q3 2021 (5.3%).

However, the labour turnover rates show that the average monthly recruitment rate in Q3 2021 (1.9%) is higher than the average monthly resignation in Q3 2021 (1.8%). Furthermore, different occupations in Sector C26 also show that the recruitment rate is generally higher than the resignation rate.

In addition, retrenchments have declined drastically from the start of the pandemic, as seen from 3Q 2020, where it was 9,120 to 1,900 in 3Q 2021.

Trade and Industry Minister Chan Chun Sing also stated that they aim to grow the manufacturing sector by 50% over the next 10 years. In the report, Mr Chan noted that the manufacturing industry should pave a pathway towards a goal where there can be a qualitative transformation of the sector into advanced manufacturing, making up a more significant market share.

Despite the pandemic, Singapore's government has played a prominent role in helping its citizens become employed once again. For example, packages under the SGUnited Jobs and Skills have supported hiring nearly 400,000+ locals by 58,000 businesses from September 2020 to May 2021. What's more, is that the Jobs Growth Incentive has been extended to March 2022.

Furthermore, employers can tap into Career Conversion Programmes to train and hire mid-career workers for new job roles with impressive long-term aspects with available support up to 90% of salary and training expenses.

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MICROECONOMIC PRELIMINARY ANALYSIS

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MACROECONOMIC PRELIMINARY ANALYSIS

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Market structure of semiconductors and elasticity

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Analysis: Semiconductor industry ready for 2021 rebound

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Slowdowns in global trade and business investment crippled chipmakers in 2020 as the pandemic spread, but the industry has proved resilient. This comprehensive research report introduces the semiconductor industry and

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I am happy that our team is able to synergize well with each other and are capable with working together to accomplish our tasks whilst also keeping a positive, friendly and meaningful discussion.

An area of improvement would be to try and reduce the length of meetings as it tends to drag on longer then it should be.

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Thanks for putting in the effort to complete this on time guys

I think one improvement we can have is to complete our work earlier so as to be more punctual

One interesting thing I found out while completing this activity was that semiconductors are the 21st centuries "oil", and a lot of it is all produced by one company, TSMC.

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This group is able to work well together, respecting each other's opinions and our discussions are fruitful, despite any disagreements when it comes to the work. We are able to work out our differences and come to a unanimous decision.

Something we need to improve on is our ability to focus during group meetings, as we may get sidetracked.

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I've grown to appreciate this team more as each member has a unique strength/skillset that benefits the entire team as a whole and allows us to push forward towards an AD. :)

Of course, an area of improvement could be that we must remain focused on the task and know what we want to accomplish during group meetings.

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1. Why there is a chip shortage

https://www.bbc.com/news/business-58230388

2. 4th largest semiconductor manufacturer GlobalFoundries states their chip capacity is sold out through 2023.

https://www.cnbc.com/2021/10/30/globalfoundries-ceo-were-sold-out-of-semiconductor-chip-capacity-through-2023.html

3. PS5 resell price drops by 30% from peak but still selling at an all-time high around US$715+ ($S965)

https://www.forbes.com/sites/jaymcgregor/2021/09/11/scalpers-lose-30-on-ps5-prices-despite-restock-problems/?sh=19b196582c1a

4. Singapore's new $3 billion investment in a semiconductor factory has provided 600 new jobs.

https://www.straitstimes.com/business/companies-markets/chipmaker-siltronic-breaks-ground-on-new-3b-manufacturing-facility-in

5. Semiconductor firm Infineon partners CapitaLand, Hyundai to invigorate start-up innovation in Asia

https://www.straitstimes.com/business/companies-markets/semiconductor-firm-infineon-partners-capitaland-hyundai-to-invigorate

6. For local semiconductor equipment maker, it’s hip to make chips

https://www.straitstimes.com/business/for-local-semiconductor-equipment-maker-its-hip-to-make-chips

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The tiny but mighty microchip is at the heart of every tech tool that powers your life - from smartphones and electric vehicles to 5G networks and solar panels.

It is also the force that drives NexGen Wafer Systems' expansion. The company develops and sells machines that add circuits to wafers, a crucial step in creating microchips.

NexGen was founded by chief executive Cheung Ting Kwan, 45, and three others in 2011. As a veteran in the industry, Mr Cheung brings with him not just knowledge about chips, but also effective leadership.

He recalls the hardship he endured when, at 27, he started his first company providing services to semiconductor companies. "The early years were tough. I was single then and even slept in the office so I didn't have to pay for a home. It taught me a lot about determination, how you have to keep going even when you really want to give up."

He has since taken a step back from the company to focus on NexGen, his second business venture.

Mr Cheung's experience in adversity was useful in managing the uncertainties when the Covid-19 pandemic struck last year. "We didn't know what would happen to our (semiconductor) industry," he says.

"Thankfully, our sector recovered, and there is even more demand than before for microchips and the machines that make them. This is a great chance for us to grow our business."

The global shortage of chips - triggered by the pandemic and exacerbated by the high demand for consumer electronics - has affected production for everything from smartphones to cars.

Demand could continue to outpace supply, as cities and firms invest in electric vehicles, 5G networks, and other products and infrastructure that require the chips. In January, NexGen came up with a five-year plan to make the most from the dynamic opportunity.

NexGen has also started research and development (R&D) projects to create more applications for its machines, including at a new joint laboratory in Singapore with the Agency for Science, Technology and Research's Institute of Microelectronics (IME).

When Mr Cheung co-founded NexGen, it was one of the first in Singapore to focus on equipment to put circuits on wafers. He resolved to make it a success.

His perseverance has paid off. Revenue has grown by about 20 per cent annually over the past five years, and is expected to improve even further in the coming years.

A global plan for growth

NexGen's story is one of strategic global expansion, with Mr Cheung carefully steering the company's growth.

When he and his three co-founders, which includes two Austrians, created the company, they set up an office and a factory in Austria to take advantage of the country's engineering talent.

"Austria has a very strong engineering base, with many veterans in mechanical, electrical and other fields of engineering. It also has a well-established supply chain, which enabled us to get off the ground quickly."

With NexGen's business in the US growing in recent years, he opened an office in New York in May with the support of enterprise development agency Enterprise Singapore (ESG). Next in the pipeline: Offices in China and Japan.

NexGen Wafer Systems, headquartered in Singapore, is expanding overseas amid the global microchip shortage. PHOTO: THARM SOOK WAI

"Our goal is to have regional offices and dedicated staff for every market that we are in, so that we can scale up our business more easily and better support our customers," he says.

Besides entering new markets, NexGen will also expand its factory in Austria and open a second one, possibly in Singapore, to quadruple its manufacturing capacity. This will be its first factory located outside of Austria. It plans to hire more people, both in Singapore, which houses its global headquarters, and overseas.

Innovating for the future

Looking ahead, NexGen will expand its range of offerings. It set up a joint laboratory with IME in May to develop new applications for its machines. ESG helped connect the two partners.

Mr Cheung explains the need to keep innovating: "New microchips are being created every day. These include new chips for the image sensors that allow self-driving cars to 'see'. You also have chips that are being made out of new and emerging materials, such as silicon carbide and gallium nitride.

NexGen chief executive Cheung Ting Kwan firmly believes in the need to keep innovating. The company is exploring new applications for its machines, which add circuits to wafers. PHOTO: THARM SOOK WAI

"If we want to grow, we need to make sure that our machines can support these new kinds of chips. That's the focus of our laboratory with IME. We want to have new capabilities that we can show to our customers and use to differentiate ourselves in the market."

It is also tapping on ESG's network, as it considers working with other firms to design new products and technologies.

Mr Cheung's advice for other businesses, especially small and medium-sized enterprises (SMEs): Continue to find ways to improve.

"If you stand still in the marketplace, other firms will overtake you. Always strive to be better," he says. "Keep an open mind. Learn, upskill and change to stay ahead of the curve."

Helping hands in foreign lands

When NexGen wanted to set up an office in the US, it reached out to ESG's overseas centre in New York for advice. The New York overseas centre is part of ESG's global network with a presence in over 35 cities, helping Singapore businesses like NexGen expand into new markets.

Mr Cheung explains: "Even though the US is one of the friendliest places for businesses, it's still not easy for Singaporean firms. You have to know how to handle things like sales and income taxes, which are different in different states, and health insurance for employees."

ESG's New York overseas centre connected NexGen to a lawyer who walked it through the necessary legal and corporate processes and requirements. The agency has assisted the company in other ways, including by introducing it to potential partners for financing and R&D projects.

SMEs should seek assistance when they need it, he says, especially if they are aiming to enter overseas markets. "We really benefited from ESG's help."
This is the fifth of a six-part series titled "Keep Growing" in partnership with

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For local semiconductor equipment maker, it's hip to make chips

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The tiny but mighty microchip is at the heart of every tech tool that powers your life - from smartphones and electric vehicles to 5G networks and solar panels. It is also the force that drives NexGen Wafer Systems' expansion. The company develops and sells machines that add circuits to wafers, a crucial step in creating microchips.

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Microeconomics Prelim Analysis [Based on 5 key sources of information]  

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Microeconomics Prelim Analysis [Based on 5 key sources of information]  

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1. Companies struggles to supply chips while demand rises [Jordon]

Support from key sources:

- Semiconductor shortage will expand into 2022 after major global tech companies stated that production will struggle to meet the soaring demands for its product

- Companies like Intel and Samsung have invested $US37 billion into chip foundries which expect to begin production only in 2025. Meaning from now to 2024 expect the chip shortage to be consistent or worsen.

- As the pandemic unfolded, early signs of fluctuating demand led to stockpiling and advance ordering of chips by some tech firms. Leading to a lower supply and a higher demand as others struggled to acquire the components.

To find out more for report writing:

- Who and which products suffer the worse from this chip shortage

-How sales of products (PS5/Graphic Cards/iPhones) are affected

2. Rising chip prices and their impact [Pearlyn]

- Since 2020, chip prices have been surging due to a worldwide shortage. Multiple companies have raised their chips' prices, including small foundries.

- TSMC, the supplier of 90% of the world's chips, raised prices up to 20%. Smaller companies like United Microelectronics charge more for their services, compared to the biggest supplier. This can be related to economies of scale, as companies of bigger size tend to spread costs that are relatively constant over larger output as compared to that of smaller companies

- Electronic items that use chips would be affected, consumers have to pay more.

- Chip shortage is expected to last until 2023.

To find out more for report writing:

- How much price increase can consumers endure before they stop buying?

-Will there be more price hikes in the foreseeable future?

- At which point will it drop in demand (resulting from higher prices and consumers buying less) to the extent that chip prices will start dropping.

3. Explosive surge in demand for semiconductors [Kieran]

- Pandemic declared, cities down, borders close and millions are laid off. Everyone needs a PC for work from home life. Chromebook and tablet sales boom, adding more demand for semiconductors and adding pressure on chip manufacturers

- Cryptocurrency boom, Bitcoin jumped from 10k to 30k in 2020 Q4, crypto enthusiasts now look for GPUs to mine their currencies, adding more demand for semiconductors.

To find out more for report writing:

-What other products require semiconductors?

4.   Chip shortage affects everyone [Joshua]

- There is a huge influx of new products which are putting a strain on the supply chain

- Sony, Microsoft, Apple, Samsung and world car manufacturers have to postpone, delay or scale back their production due to components that cant be made without the chips.

- Inability for the supply chain to keep up with the demand leads to graphic card shortages (Or any semiconductor products) and an inflated resale market for the foreseeable future.

To find out more for report writing:

- What is the production cycle of chips

- Why are chips so essential nowadays

5.  Market structure and elasticity or semiconductors: Oligopoly market structure and elasticity of prices [Everyone]

- Semiconductor supplier market type is a non-cooperative, tight oligopoly that’s competitive

- Firms could collude to raise prices as there is inelastic demand for semiconductors, but constant price declines for semiconductors and electronic components is remarkable, suggesting little to no cooperation or collusion

To find out more for report writing:

- Why isn't there colluding or cooperation between the manufacturing  firms

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Effects of global chip shortage

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While anyone reading this will know it has been hard finding a PS5 lately, loads of other markets are experiencing shortages as well, thanks to a global "crisis" affecting the supply of semiconductor chips to-well-anything that uses them. And that's a lot of stuff.

As The Guardian reports, while the supply of chips should be improving now that we're months out from some of the worst Covid lockdowns and distribution disruptions, things have actually gotten worse because of market changes (we've been buying a lot more computers and TVs and consoles while stuck at home), and a huge influx of new products using them, putting further strain on the supply chain.

PlayStation 5 and Xbox Series X shortages are just the tip of the iceberg. Big phone launches from companies like Apple and Samsung have been postponed, new graphics cards are still hard to find, and all over the world car manufacturers are either scaling back production or piling unfinished cars up in parking lots while they wait for the chips needed to power their software systems.

"Chips are everything," tech analyst Neil Campling told . "There is a perfect storm of supply and demand factors going on here. But basically, there is a new level of demand that can't be kept up with, everyone is in crisis and it is getting worse."

We reported last month that President Biden was looking at "reviewing the causes" behind this, but it's hard seeing what good that could do; we know the reason, and it's simply that supply of the chips isn't enough to meet demand, and may not be for quite a while, which is only going to make things like graphics card shortages and an inflated resale market worse for the foreseeable future, until production can increase (or at least just catch up).

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Global Chip Shortage, Affecting Everything From PS5s To Graphics Cards, Is Becoming A "Crisis"

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While anyone reading this will know it has been hard finding a PS5 lately, loads of other markets are experiencing shortages as well, thanks to a global "crisis" affecting the supply of semiconductor chips to-well-anything that uses them. And that's a lot of stuff.

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Timeline of the GPU shortage

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Inside the GPU Shortage: Why You Still Can’t Buy a Graphics Card

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How scalpers, a pandemic, and a cryptocurrency boom formed a perfect storm that continues to make PC building an exercise in futility.

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Chip price hikes imminent

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Prices of semiconductor chips have been climbing since the last quarter of 2020 amid a global supply crunch.

Taiwan's TSMC is the most recent to announce intentions to increase prices of most advanced chips by roughly 10%; less advanced chips will cost about 20% more.

The industry-wide move likely will impact the sticker prices of end products.

Consumers would be paying more for electronics starting next year as foundries are raking up semiconductor chips prices by as much as 20%. The most recent price hike is being done by the world's biggest contract chipmaker , Taiwan Semiconductor Manufacturing Co (TSMC).

It would be TSMC's biggest price hike in a decade , with most of its most advanced chips to see a 10% increase in price, while less advanced chips used by customers like automakers will cost about 20% more. According to Wall Street Journal , the higher prices will generally take effect late this year or next year.

As it is, TSMC controls over half the global foundry market, making chips for the likes of Apple, Nvidia, and Qualcomm. Known for its cutting-edge tech and high quality, the Taiwanese company normally commands production fees around 20% higher than its rivals, according to industry insiders.

It is however fair to note that prices of semiconductors have been climbing since the last quarter of 2020 amid a global supply crunch . Smaller foundries have repeatedly ramped up their own prices and United Microelectronics, the world's third-largest player, now charges more than its bigger compatriot for some services, four industry executives told Nikkei Asia .

Why hike the prices of semiconductor chips?

Experts reckon there is a range of factors to these higher prices, including higher material and logistics costs, as well as the race by device makers to secure adequate chip supplies. It has especially been the case since the chip shortage first began to bite late last year.

All this would mean the prices of chips for consumer products would rise too unless brand-name companies decide to absorb the higher costs. As it is, chip shortages have driven up prices for laptops , which are in high demand because more people are working remotely.

Already, graphics processor giant Nvidia has already warned that supplies of its GPUs will be tight next year: "A supply-constrained environment for the vast majority of next year is my guess at the moment," Nvidia chief executive Jensen Huang during an earnings call earlier this month.

Reports even stated the possibility of AMD and Qualcomm raising prices as well, affecting Ryzen CPUs, Radeon GPUs, and the leading-edge smartphones that use the Snapdragon chips. Even consoles like the Microsoft Xbox Series X/S and Sony PlayStation 5 use APUs manufactured by AMD, which are by TSMC may be impacted.

Another reason behind the price hike would be concerns over lower profitability. TSMC has said it will make US$100 billion in capital investments over three years through 2023. That commitment has fueled qualms about a potential decline in profits as the Taiwanese semicon giant prepares to boost its overseas expansion.

What does this mean, then?

Unfortunately, there really aren't many alternatives to the world's largest chipmakers. TSMC's market dominance gives it more pricing power than suppliers usually enjoy - its chips account for more than half of the global semiconductor foundry market by revenue, according to Taiwanese research firm TrendForce. This makes it the manufacturer of more than 90% of the world's most advanced chips.

To recall, in April, TSMC executives said that they expected the chip shortage to last through 2023.

All this is the sound of the other shoe dropping-right on your wallet.

Overall, the impact of TSMC's prices will be felt more obviously from next year, experts say, as the company is still working through existing orders.

In the short term, however, analysts reckon higher prices could push down demand and preserve supply for customers who have no other choice.

So, companies who require more devices - it would be wise to have a more careful look at your budgets in the coming year.

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What happens when foundries ramp up prices for semiconductor chips?

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Prices of semiconductor chips have been climbing since the last quarter of 2020 amid a global supply crunch. Taiwan's TSMC is the most recent to announce intentions to increase prices of most advanced chips by roughly 10%; less advanced chips will cost about 20% more.

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Chipmaker for Apple, Qualcomm, AMD warns chip shortage to last through 2022

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Chip supply shrinks as demand for chips surges

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(Image credit: Wang Gang/China News Service via Getty Images)

The semiconductor shortage will definitely extend well into 2022 after the chip provider for some of the largest tech companies in the world said that production will struggle to meet the soaring demand for its products.

In an online conference this week, TSMC CEO Dr. C.C. Wei said that TSMC foundry production capacity was still insufficient to satisfy the demand for its chips, especially orders for components used for high-performance computing (HPC) systems and 5G devices using the company's 5nm process node.

The company's other process nodes, which are heavily used in automobiles, IoT, and server equipment, are also stretched thin according to the Taiwanese news outlet United Daily News. While TSMC is not nearly as large as Intel in terms of revenue, it has a much more diverse customer base since its chips are used by companies like Apple, AMD, Qualcomm to make everything from networking equipment to iPhones and graphics cards.

If TSMC is stretched thin across its most important process nodes, then a far greater number of industries are going to be impacted by the constrained capacity than if Intel were facing the same production constraints which impacts the more "traditional" computing market more than anything else.

In fact, even Intel is starting to contract with TSMC to make various chips and is itself starting to make chips for other companies like Amazon and Qualcomm to try and meet the global demand for semiconductor components.

The only way the chip shortage will ever be addressed, though, will be to build more foundries to increase capacity, since demand for this most essential component of modern technology is only going to increase in the future as more of everyday life becomes digitized, from smartphones to smart cities.

Dr. Wei also said during the conference that the company expects to begin mass production on its 2nm process node in 2025, and the company broke ground earlier this year on a new foundry in Arizona based on its 5nm process, which is expected to be completed in 2024.

Rival semiconductor fabricator Samsung, meanwhile, is in negotiations to invest $17 billion into a second semiconductor foundry in Texas, in addition to increasing investment in its current plant in Austin to boost capacity.

Intel is set to spend around $20 billion to build two new foundries in Arizona and recently contracted with the US Department of Defense to build capacity for the company's most advanced node, 18A, which it expects to begin use in production starting in 2025.

(Image credit: FREDERIC J. BROWN/AFP via Getty Images)

The chip shortage will never go away, here's why

While most industry professionals will tell you that they expect the chip shortage will last into 2022, this might leave the impression that sometime in 2022, the chip shortage is going to end and that you'll be able to finally buy a PS5 or the best graphics cards that are all but vaporware right now.

That's not quite what they're saying, though, since businesses project conditions out to a certain point in time to plan their business strategies, production, and inventories. Given the number of variables involved in such financial modeling, you can only really take it so far before your numbers become unreliable. That's what CEOs and such actually mean when they say the chip shortage will last through 2022.

That means, in 2022, they could all show up at conferences to say that the chip shortage will last through 2023 or 2024, and honestly, that is what's going to happen unless the new reality that this chip shortage isn't a shortage at all, but a systemic deficit settles in.

Chip foundries take years to build, so a number of new plants that come online in four years are going to do anything to meet the demand for chips as it currently exists. And as anyone with a cellphone that starts to degrade in performance after a couple of years can tell you, just because TSMC or Samsung fabricated the chip that runs your phone today doesn't mean that they've satisfied your demand, at least not permanently.

Every couple of years, those foundries are going to have to fab all new chips to power your next phone, and the one after that. On top of that, they now also have to fab the chips that run your new Wi-Fi 6 router, and your Nest Hello doorbell, and your car.

They're also going to have to build the chips to meet the demands of all the new customers they're picking up in parts of the world that had been neglected for the past twenty years in the Global South and many parts of Asia that are starting to see a booming consumer market for these goods.

And that's just consumer electronics, we're not talking about all the new networking infrastructure we're going to need for the delayed 5G rollout, and then 6G when that comes around down the road.

Demand is only increasing, and its growth is likely to be closer to exponential rather than linear. Adding to the number of fabrication plants isn't going to be enough to keep up when we need to be multiplying the number of plants.

On top of all that, you have a physical supply chain that can disrupt production capacity at any number of points along the way, something we're seeing even with the recent port crisis in the US. All the while, demand might slow or even flatten out a bit, for a while, but it will never suddenly start declining in a way that could allow production to catch up.

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Chip maker for Apple, Qualcomm, AMD warns chip shortage to last through 2022

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(Image credit: Wang Gang/China News Service via Getty Images) The semiconductor shortage will definitely extend well into 2022 after the chip provider for some of the largest tech companies in the world said that production will struggle to meet the soaring demand for its products. In an online conference this week, TSMC CEO Dr. C.C.