Speech by Mr LIM HNG KIANG, MINISTER for trade and industry, at the opening of showa denko Hard DISK Singapore (SHDS) PTE LTD’s second hard disk media plant at pioneer CRESCENT on THURSDAY 14 December 2006, 11.30 am

Your Excellency, Mr Takaaki Kojima, Ambassador of Japan to Singapore,

Mr Kyohei Takahashi, President and CEO, Showa Denko K. K.,

Mr Yasumasa Sasaki, Representative Director, Senior Managing Director and Executive Officer, Electronics Sector Showa Denko K. K.,

Mr Shinji Sakai, Managing Director, Showa Denko HD Singapore Pte Ltd,

Ladies and Gentlemen,

Good morning.

It is my honor to be here today at the official opening of Showa Denko’s new hard disk media plant.

To begin, let me paint a picture of the storage industry globally. Today, we are seeing an exploding diversity of storage demand ranging from the traditional IT applications of servers, desktop PCs, notebook PCs to the consumer electronics sector. With the widespread popularity of gaming, mobile phones, digital photography and audio, we can expect the need for hard disk drives to continue to grow. In fact, according to the research analysts at IDC, a leading provider of market intelligence for the information technology sector, the hard disk drive industry is expected to grow to US$40 billion in 2009. This is a more than 40% jump from 2005.

So how can Singapore benefit from such an explosive growth? Over the years, Singapore has developed a strong base of hard disk drive component suppliers and capabilities, in areas ranging from media to motors and base plates. We believe that this base and infrastructure puts us in a very good position to support the development and manufacture of hard disk drives, particularly the high-end hard disk drives, here.

If we look back, Singapore’s hard disk drive industry took root in 1984 and we have since expanded our offerings and moved towards higher value-added drives and key components. We are now a major base for the final assembly of high-end enterprise hard disk drives, accounting for more than half of the enterprise market share in terms of volume.

At the component level, we have been able to attract the attention of leaders in the hard disk drive industry. We are talking about the largest merchant media manufacturer – Showa Denko, the largest captive media manufacturer – Seagate, and the technology leader in glass disk media – Hoya. The presence of all these key players in Singapore is a very telling sign of our capabilities and attractiveness to companies in the sector. In 2005, Singapore accounted for over 25% of the world’s hard disk media output in terms of volume.

Today, our activities in the hard disk drive sector extend beyond manufacturing. We are seeing a good increase in research and development activities from companies. This is in addition to the work of research institutes like the Data Storage Institute, or DSI in short, that serve the hard disk drive industry.

Showa Denko started its hard disk media manufacturing operation here in 2003 when it acquired Mitsubishi Chemical Group’s hard disk media plant in Singapore. Last year, around this time, the Showa Denko Group announced a new medium-term business plan called the “PASSION Project”. Under this plan, one of the Showa Denko Group’s key aims was to establish itself as a unique chemical company with competitive individualized products. Hard disk media was identified as a growth driver for the Group and we are glad that Singapore has been selected to play an important role in this strategy.

What we see now – this new plant – is a physical realization of this strategy. It is Showa Denko’s second plant in Singapore and the Group’s fourth and largest worldwide. The Showa Denko Group will invest 60 billion yen in this facility and this project will create 600 jobs when it is fully realized. To us, this speaks of the continued value that Singapore can offer to companies in this industry.

To support the rapid expansion of hard disk media operations in Singapore, EDB is working with the DSI and other agencies to provide training for all levels of hard disk media employees to ensure the availability of manpower. For engineers, we are extending the existing DSI and university programmes. For the technicians and operators, we are working with the Singapore Polytechnic and the ITEs to come up with new courses to supplement diploma level and post-NITEC level manpower respectively.

Besides employment creation, this plant will also produce disk media using the latest perpendicular magnetic recording technology. I understand that even the infrastructure, for instance the clean room facilities, has been designed using the latest technology so as to support the manufacture of new recording technologies beyond perpendicular magnetic recording. This will enable Singapore to stay ahead of the technology race.

With the establishment of this new plant, and the expansion plans by other hard disk drive companies, Singapore will be able to at least double our annual hard disk media output by 2008. This will make us a major manufacturing base for hard disk media worldwide.

In conclusion, I would like to reiterate our support to Showa Denko and thank you for your confidence in Singapore throughout all these years. With the global demand for hard disk drive rising, and the technological and manufacturing foundation well prepared, I’m confident that Showa Denko will grow and flourish in Singapore.

My best wishes to Showa Denko for many successful years ahead. Thank you.