He outlined the Republic's proactive approach at yesterday's opening of the US$1 billion (S$1.37 billion) Siltronic Samsung Wafer manufacturing plant in Tampines.

'As a small city state, we cannot always offer the lowest absolute costs, or provide land to semiconductor firms as cheaply as other locations in the world,' said Mr Lee.

But 'the Government remains committed to working with semiconductor companies, to understand their needs, reduce the obstacles they face, and help them succeed in this exciting but challenging environment', he added.

Mr Lee pointed to Singapore's key strength - its high-tech electronics manufacturing ecosystem, which includes wafer fabrication plants, design firms, assembly and testing firms, and material and equipment suppliers.

He said the new silicon wafer plant, which is a 'key addition to this ecosystem', further extends Singapore's semiconductor value chain.

The upcoming Fusionopolis research and development hub, offering a place where companies and research institutions can collaborate and share ideas, will also help companies stay on top of current technologies and come up with new ones, said Mr Lee.

And Singapore will 'offer an open and supportive environment for businesses to implement ventures and projects speedily and efficiently', he said.

The helping-hand policy was brought into play for the plant with sweeteners such as tax breaks and help to overcome administrative obstacles.

Once production gets into high gear in 2010, the plant will provide more than 800 jobs, from engineering positions to technicians and clean-room operators.

The plant on 8 ha in the Tampines high-tech park is a 50-50 joint venture between Siltronic, a unit of German chemical conglomerate Wacker Chemie, and South Korean electronics giant Samsung.

It is Singapore's first 300mm wafer fab plant and only one of about 20 worldwide capable of making the product at that diameter.

By 2010, the plant will make 300,000 of the gleaming round wafers a month, said Siltronic chief executive Wilhelm Sittenthaler yesterday at a press conference.

These slices of silicon are the building blocks for computer chips. The plant's main customer will be Samsung, which willturn the wafers into memory and other types of computer chips.

The chips then go into items like mobile phones, computers and cars.

The plant's output will also be sold to other customers, but Dr Sittenthaler declined to give details.

chuahh@sph.com.sg

HELPING FIRMS SUCCEED

'The Government remains committed to working with semiconductor companies, to understand their needs, reduce the obstacles they face, and help them succeed in this exciting but challenging environment.'

PM LEE, on Singapore's approach in attracting semiconductor companies