Singapore will top up the National Productivity Fund by $3 billion to help it compete in new frontier areas including artificial intelligence (AI) and quantum computing.
“Our approach and strategy must adapt to changing circumstances. At this stage of development, we can no longer compete on cost alone. Instead, we must differentiate ourselves by producing high-value solutions for the world to take our economy forward,” says Prime Minister Lawrence Wong during the Budget 2025 speech.
The government has invested about 1% of GDP annually in R&D over the last 20 years. These investments have borne fruit, especially in the semiconductor and biotechnology sectors, says Wong.
He also shares that Singapore supplies more than a tenth of chips and produces 20% of semiconductor equipment worldwide. It also produces more than 80% of the world’s DNA chips, which are used in identifying diseases. Eight of the world’s top 10 pharmaceutical firms have set up manufacturing operations here too.
US medtech firm and DNA chip maker Illumina is among the companies with a regional headquarters and manufacturing site in Singapore. Designed and manufactured in the city-state, Illumina’s genome sequencing technology played a crucial role in enabling scientists worldwide to develop Covid-19 vaccines.
According to Wong, Illumina’s presence has also benefited Singaporean enterprises. Sunningdale Tech, for instance, supplied critical components for Illumina’s DNA sequencing kits.
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To sustain momentum, Singapore plans to invest an additional $1 billion in research infrastructure. This includes the establishment of a new national semiconductor research and development (R&D) fabrication facility, which will provide “industry-grade tools for researchers and industry partners to prototype and test new semiconductor innovations”, says Wong.
Additionally, Singapore will refresh the public biosciences and medical technology research infrastructure in the greater one-north area.
Follow the market’s reaction to Budget 2025 on The Edge Singapore.
