SPEECH BY MR LIM HNG KIANG, MINISTER FOR TRADE & INDUSTRY, AT THE OPENING OF SOITEC’S 300MM SILICON-ON-INSULATOR (SOI) WAFER FABRICATION FACILITY, ON 07 November 2008, 11.05 AM, AT PASIR RIS WAFER FAB PARK

Your Excellency Pierre Buhler
Ambassador of France in Singapore,

Dr André-Jacques Auberton-Hervé
President, CEO and Chairman of Soitec,

Dr Emmanuel Arene
CEO, Soitec Singapore Pte Ltd,

Ladies and Gentlemen,

Good morning,

I am very pleased to be here this morning at the opening of Soitec’s new manufacturing facility. Today's event marks a “first” for both Soitec and Singapore. This new facility is Soitec’s first overseas manufacturing operation. It is also Singapore’s first silicon-on-insulator (SOI) wafer fabrication plant. Soitec’s S$ 700 million investment in Singapore is expected to produce one million 300mm SOI wafers every year, employing 500 staff when it is fully operationalized.

As many of you already know, Soitec is the world market leader with 80% share in SOI wafers. The establishment of its first manufacturing facility outside of France, here in Singapore, is indeed a very significant milestone for Singapore’s electronics industry.

Electronics is pervasive in today’s digital world, and semiconductors are the basis of all electronics. Dealing with the challenges and requirements of modern devices require us to integrate more of the know-how, functionalities, and intelligence directly to the semiconductor chips. Like most sectors, the global economic turmoil has affected the electronics industry, and there is some uncertainty in short-term demand. Nonetheless, the long-term outlook for the industry remains positive and we should continue to invest in development so that we are well positioned for the eventual upturn.

Singapore has developed a vibrant and comprehensive semiconductor landscape over the last 40 years. In 2007, the output of the semiconductor sector in Singapore reached $36b accounting for 52% of the total electronics industry output. Today, the sector has about 40 IC design companies, 14 silicon wafer fabrication facilities and 20 assembly and test plants. To sustain the competitiveness of Singapore’s semiconductor industry, we have adopted a “three-pronged strategy”.

First, we assist local wafer fabrication plants to scale their operations and reap economies of scale. Second, we develop strong process R&D activities to ensure wafer fabrication plants are at cutting edge technology. Finally, we build a vibrant semiconductor ecosystem consisting of wafer fabrication complemented by IC design and assembly & test and supported by a strong base of substrate, chemical and equipment suppliers. This will enable the semiconductor industry in Singapore to be competitive and self-sustainable in the long-run.

As Singapore’s first 300mm SOI substrate manufacturing facility, Soitec’s presence enhances Singapore’s semiconductor ecosystem and testifies to our competitiveness in the global semiconductor industry.

The know-how that Soitec brings to Singapore is impressive. The SOI technology allows chips to function 30% to 40% faster than conventional chips, while consuming only half as much power. It could be an alternative technique to gain more performance without going the expensive route of scaling down to the next technology node. SOI wafers also have a wide range of downstream applications and can be used in advanced semiconductor devices like microprocessors, smart power devices, and optoelectronic circuits.

Singapore’s semiconductor ecosystem provides the ideal platform for Soitec to share their technology and form more manufacturing and R&D partnerships with Singapore-based companies. In this way, Soitec could increase the adoption of its technology, grow its business and further expand the wafer fabrication facility in Singapore.

On this note, let me congratulate the management and staff of Soitec on the opening of this new facility. I thank you for your trust and confidence in Singapore and wish you every success.

Thank you.