The many ills plaguing Singapore’s chipmakers

Global headwinds, hiring woes and spiking energy prices are conspiring to stunt the city-state’s semiconductor aspirations

Robust demand for Singapore’s electronics and semiconductors during the pandemic fueled the city-state’s fastest economic expansion in over a decade and big-ticket investments in chip-making capacity. Now, the notoriously cyclical semiconductor industry is in the grip of a deepening downturn as geopolitical and inflationary headwinds buffet the global economy.

Chip makers in the island nation are increasingly concerned about the near-term possibility of a recession, with many feeling the sting of soaring electricity prices linked to energy market disruptions worsened by Russia’s war on Ukraine. Singapore-based semiconductor and related firms are also contending with a tight domestic labor market and regulations that have raised the cost of and otherwise discouraged hiring foreigners.

“What is happening with Ukraine, with the shutdowns in China…when the uncertainty of a possible recession is coming up, or even stagflation in some countries, there is a fear that consumer demand will start to drop. Of course, this will have a direct impact on chip demand,” said Ang Wee Seng, executive director of the Singapore Semiconductor Industry Association (SSIA).

Faltering global demand is already being acutely felt in Singapore, with manufacturing sector growth falling to an 11-month low in August. All sector segments saw a fall in output, led by a 19.3% slide in the production of modules and components. It marked the third straight month of contraction in semiconductor production; the broad electronics sector has shrunk for two consecutive months.

Read the full story at Asia Times.

Nile Bowie is a journalist and correspondent with the Asia Times covering current affairs in Singapore and Malaysia. He can be reached at nilebowie@gmail.com.

UMNO split widens on ‘free Najib’ rally cry

Divisions inside Malaysia’s ruling party over ex-premier’s fate could hit a breaking point ahead of pivotal general elections

Former Malaysian prime minister Najib Razak’s jailing for corruption has accentuated a deepening divide inside the ruling United Malays National Organization (UMNO), one that threatens a party-splitting schism with new general elections on the horizon. One UMNO camp seeks to distance itself from the newly incarcerated but still influential ex-leader, while a rival faction embraces his “justice denied” narrative, a persecution theme analysts expect it to play up to win votes on the hustings.

Prime Minister Ismail Sabri Yaakob appears to prefer looking forward and forgoing the politics of grievance in favor of economic deliverables. The premier is expected to personally table what will be the country’s largest-ever national budget next month, which analysts say is likely to presage the dissolution of parliament and calling of early elections.

UMNO president Ahmad Zahid Hamidi, on the other hand, has made clear he is backing Najib to the hilt. Observers speculate that the party leader, who faces a possible corruption and money laundering conviction that could likewise send him to prison, intends to engineer Ismail’s removal after an expected election victory in his capacity as the Barisan Nasional (BN) governing coalition’s chairman.

“Zahid and Najib remain very influential within the UMNO party hierarchy,” said Francis Hutchinson of the Malaysia Studies Program at Singapore’s ISEAS-Yusof Ishak Institute. “The party machinery has publicly come out in favor of Zahid and Najib, and the ‘old guard’ is sending out the message that aspiring candidates for parliament need to toe the line if they want to be fielded.”

Read the full story at Asia Times.

Nile Bowie is a journalist and correspondent with the Asia Times covering current affairs in Singapore and Malaysia. He can be reached at nilebowie@gmail.com.