Chip manufacturing accounted for nearly a third of Singapore's manufacturing output last year, and the industry's decline reinforced expectations that the export-dependent economy might fall into recession in the coming months.
For a long time, chip production has been one of the core elements of Singapore's success. The microchips produced in Singapore are used in various fields, from mobile phones to automobiles. Singapore is also seen as the vane of the global economy.
"We have found that this downturn is different from the past," said Ang Wee Seng, executive director of the Singapore Semiconductor Industry Association (SSIA).
He said he was preparing for "the worst" and keeping employees on standby to help unemployed workers find new jobs.
John Nelson, co-chief technology officer of Singapore-based chip testing and assembly company, told Reuters that he had launched a "consolidation process" in Singapore, which could lead to 10-20% job cuts by the end of the year.
United Technologies employs 10,280 people worldwide, of whom about 1,700 are in Singapore.
"We are taking appropriate action to ensure that our business in Singapore has a future," Nelson said, adding that factory closures and unpaid vacations may also be extended.
Nelson pointed out that although the global industry is experiencing difficulties, Singapore's problems are exacerbated by high costs such as rent, wages and utilities.
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