Mr Mike Splinter, Chairman and Chief Executive Officer, Applied Materials,

Ladies and Gentlemen

Good morning.

I am pleased to be here today to witness the signing of the Master Research Collaboration Agreement between Applied Materials and A*STAR’s Institute of Microelectronics (IME). This agreement to establish a new Centre of Excellence in Advanced Packaging marks yet another major milestone in the Singapore-Applied Materials partnership.

Singapore - Home for Business and Innovation

The Singapore-Applied Materials partnership started twenty years ago when Applied Materials set up a modest branch office here.Since then, the company’s presence in Singapore has grown tremendously. Just last year, Applied Materials opened its Singapore Operations Centre which serves as its largest semiconductor equipment manufacturing and consolidation hub in Asia. It also supports Applied Materials’ worldwide supply chain operations and other corporate functions such as sales and service, customer training, and shared services.I understand that the centre will employ close to 800 people when fully ramped up.

Today, I am happy that Applied Materials has decided to include core semiconductor equipment R&D as part of its rapidly expanding range of activities in Singapore. The new Centre of Excellence in Advanced Packaging will perform R&D in next generation semiconductor device structures, processes and equipment. It will develop the know-how to enable the integration of different chips without increasing their overall footprint, improving functionality and performance, and at lower cost. It is the first of its kind outside of the US for Applied Materials, and will extend the company’s R&D reach to Asia. Through the centre, Applied Materials will tap on IME’s advanced R&D capabilities and infrastructure, as well as access the diverse pool of talent available in Singapore.

The new centre will complement Applied Materials’ manufacturing and supply chain operations here, and play a key role in sustaining market leadership. I am delighted that Applied Materials has brought together the full value chain of activities for its Silicon Systems Group business into Singapore. Indeed, we warmly welcome your efforts to make Singapore your home for business and innovation in Asia.

Manufacturing in Singapore - Knowledge-based and Innovation-driven

The growth and evolution of Applied Materials’ portfolio in Singapore illustrates the transformation of our manufacturing sector towards higher value-added activities. Manufacturing remains a key pillar of Singapore’s economy, accounting for 22 per cent of GDP in 2010.This corresponds to a total manufacturing output of $270 billion Singapore dollars. We are committed to maintaining the contribution of manufacturing at between 20 to 25 per cent of GDP.

Over the years, our manufacturing activities have become increasingly knowledge-based and innovation-driven. For example, our semiconductor manufacturing ecosystem includes the top three foundries in the world, as well as three of the top five outsourced assembly and test players. Enabling this shift towards high-value manufacturing is our supporting precision engineering cluster, which has likewise evolved significantly over the years.

The scope of our precision engineering industry has expanded from supporting primarily the electronics and computer peripheral industries to a diverse base of industries such as Complex Equipment, Oil and Gas, Aerospace, CleanTech and MedTech.The industry now contributes 10 per cent, or over 26 billion Singapore dollars, of our manufacturing output and employs close to a quarter of our manufacturing workforce. This transformation has in turn created exciting job opportunities that require higher skills and deeper knowledge to meet the growing sophistication in manufacturing and R&D. For instance, complex equipment R&D engineers that not only understand the intricacies of the manufacturing processes, but also design and develop next generation equipment for new applications. These jobs opportunities were created as a result of companies such as Applied Materials expanding their operations here.

Singapore’s Public R&D Landscape - A Focus on Industry Partnerships

To continue Singapore’s drive towards a knowledge-based and innovation-driven economy, the Singapore Government will be investing $16.1 billion Singapore dollars in R&D and innovation from 2011 to 2015.This is a 20 per cent increase over what was allocated for the previous five year period, and represents our unstinting support for research and innovation. We will continue to encourage R&D that is integrated with industry and economic development strategies. 70 per cent of the budget will be set aside to support industry-oriented R&D in our public research institutions, and to catalyse private sector R&D. Singapore aims to increase our Gross Expenditure on R&D to 3.5 per cent of GDP by 2015, primarily through the private sector.

The new Centre of Excellence in Advanced Packaging between Applied Materials and the IME is testament to the relevance and value of our public research institutes. Applied Materials will benefit from IME’s leading edge R&D capabilities in 3D Through-Silicon Via technologies, as well as its planned 300mm R&D facility, which when completed, will be one of Asia’s most advanced in this field. IME and our universities will also provide a healthy pipeline of skilled industry-ready PhD talents to ensure the successful ramp-up of the centre. The centre will enable the development of innovative processes that will broaden IME’s Intellectual Property portfolio, allowing IME to seize more commercial opportunities and foster even more industry collaborations in the future.

The new centre clearly demonstrates the value of fostering strategic partnerships between private and public organisations in Singapore. It will strengthen Singapore’s semiconductor ecosystem, by building capabilities in advanced packaging and by extending know-how in semiconductor equipment research. This will reinforce our standing in the global scientific community as well as our significance to the global semiconductor industry.

Conclusion

In conclusion, I would like to thank the leadership team at Applied Materials for your continued trust and confidence in Singapore. I am confident that this centre will be a win-win partnership with IME. I wish you both every success.