US reshoring spurs opportunities for Singapore in semiconductor, med-tech, other high tech sectors: RHB
[SINGAPORE] US reshoring efforts present strategic opportunities for Singapore to deepen its role as a high-value manufacturing hub and a crucial partner in global supply chain diversification, a RHB Research report released on Wednesday (Jun 25) indicated.
US President Donald Trump has made US reshoring, or a shifting of manufacturing back to the country, one of his priorities. Earlier this year, as he slapped tariffs on the country's trading partners, he declared that tariffs will accelerate reshoring.
These efforts are set to reshape global supply chains, and present a mixed landscape of challenges and opportunities for highly open, trade-reliant economies like Singapore, said RHB.
'As a key player in international manufacturing and a hub for high-tech production, Singapore faces mounting pressures from shifting investment flows, evolving trade patterns, and rising geopolitical uncertainty,' the bank said.
'The potential redirection of global capital and production back to the US challenges this positioning, especially in sectors where Singapore has built strong capabilities, such as electronics and precision engineering, it added.
Singapore's manufacturing is focused on high-tech sectors such as semiconductors, precision engineering, med-tech, as well as pharmaceuticals and chemicals.
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The city-state is a key player in global semiconductor supply chains, accounting for about 10 per cent of worldwide chip production and 20 per cent of semiconductor manufacturing equipment output. Manufacturing accounts for approximately 20.6 per cent of Singapore's gross domestic product as of 2024, RHB noted.
Nevertheless, US reshoring will still spur promising opportunities for Singapore to 'thrive' amid these global economic uncertainties, RHB said.
'On the other hand, we believe that the US' reshoring efforts could also present strategic opportunities for Singapore, both as a high-value manufacturing hub and as a key partner in global supply chain diversification over the long term,' it said.
'We see immense potential for progress in high-value segments, such as semiconductor manufacturing, advanced electronics (including artificial intelligence), medical and pharmaceutical-related technologies, and renewable energy technologies, RHB added.
Singapore could benefit, the bank explained.
While the 'China Plus One' strategy encourages companies to diversify manufacturing bases beyond China, Singapore is increasingly favoured for its political stability, strong governance, robust intellectual property protection.
Growth in high-value, knowledge-intensive manufacturing: as firms move routine, labour-intensive activities back to the US or to lower-cost regional alternatives, Singapore is well-positioned to capture the more sophisticated, technology-driven segments of the value chain.
Recent investment trends highlighted Singapore's growing role in knowledge-intensive manufacturing. In 2024, manufacturing fixed asset investments reached S$11.1 billion, largely focused on semiconductors and biomedical sectors.
'While routine and lower-cost production may return to the US, American firms are likely to continue relying on Singapore for advanced, niche processes that require precision engineering, automation, and regulatory compliance,' said RHB.
Singapore's strategic focus on regional integration and digital trade: It's anchoring itself within a more interconnected and diversified Asean, and leveraging initiatives such as the Johor-Singapore Special Economic Zone and the Asean Digital Economy Framework Agreement.
Singapore complements lower-cost Asean manufacturing hubs by offering centralised research and development, testing, logistics management and regional headquarters functions, report indicated. This allows Singapore to serve regional production networks and reshoring-driven firms.
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