Singapore semiconductor firms push into US market as global AI boom drives advanced chip demand

SAN DIEGO: The global artificial intelligence boom is driving some Singapore semiconductor firms to establish a foothold in the United States, where rapid breakthroughs are reshaping the industry every few months.

The race to keep pace is intensifying across the semiconductor supply chain.

Each new advancement is fuelling demand for increasingly sophisticated chips – many of which have yet to be developed, observers say.

STAYING COMPETITIVE

Inside production facilities in Singapore, companies are scrambling to keep up.

AEM Holdings, which manufactures equipment used to test semiconductors, says the pressure has intensified as product cycles shrink dramatically.

“Our customers rely on us to launch their next generation AI chips,” said its CEO Samer Kabbani.

“If we fail, we could stop the production of these critical chips. This is a freight train moving – it will not stop for anybody.”

He added that traditional timelines – where products were stabilised over months before mass production – are no longer viable.

“Now it's almost like you finish, you go straight into production. If there are any weaknesses in the design, you have to solve them (on the go),” said Mr Kabbani. 

"Some people say you jump from the plane and you assemble the parachute as you're landing. So that's where we are now." 

To stay competitive, AEM has set up its main research and development hub in San Diego, tapping a deep pool of highly specialised talent to develop advanced engineering materials.

The firm expects the move to help double its production capacity by year-end while accelerating innovation.

Mr Kabbani noted that Southern California’s legacy in aerospace and defence has created strong expertise in advanced materials – skills that can now be applied to semiconductor development.

“We felt building a location there, attracting those people and applying this into a new industry would be a good move for us,” he noted.

SEIZING OPPORTUNITIES

Enterprise Singapore (EnterpriseSG) said the US drive to lead in AI is creating opportunities for supporting firms, including suppliers.

Ms Lim Seow Hui, director for the Americas at EnterpriseSG, said AI has become a strategic priority for the US government.

According to data from private investment tracking platform Crunchbase, AI companies like OpenAI and Anthropic shattered fundraising records in the first quarter of the year with a US$297 billion haul.

“AI development is going to grow big in the US,” said Ms Lim. “In order to do that, capital will be required, whether it's from the private sector or from the government.

“Therefore the investments into companies that are in the area of AI in the US will continue to grow.”

Other Singapore firms are also looking to ride the wave.

For some, breaking into the US market could provide long-term stability as they transition from mature semiconductor segments to more advanced technologies like AI.

NexGen Wafer Systems, which develops machines used to build chip circuits, is expanding its US presence to engage directly with major industry players.

Mr Cheung Ting Kwan, CEO of the semiconductor equipment firm, said the move will help the company secure repeat business while reaching new customers like Intel, who handle the entire supply chain from designing and manufacturing to selling.

“We have to show them our capability,” he added.

“We exchange roadmaps and ideas, know what their pain points are, what they require on the technology front, and to prove that in the next one to two years, that we are a very viable option for them – as a matter of fact, a top option for them.”