SINGAPORE: The government has allocated S$3 billion to the National Productivity Fund (NPF) to attract more high-quality investments, Finance Minister and Prime Minister Lawrence Wong said in his Budget 2025 speech on Tuesday, Feb 18.
PM Wong noted that Singapore’s annual investment of approximately 1 per cent of its gross domestic product (GDP) in research and development (R&D) over the past 20 years has “borne fruit”, citing Biopolis, which was built over 20 years ago, as a key contributor to the city-state’s biotech ecosystem.
He added that the government will invest about S$1 billion in research infrastructure to support the biotech and semiconductor sectors.
According to The Business Times, PM Wong also announced plans to develop a new national semiconductor R&D fabrication facility—one that will provide industry-grade tools for researchers and industry partners to prototype and test new semiconductor innovations.
Lee Bo Han, Partner for R&D and Incentives Advisory at KPMG in Singapore, said the new semiconductor R&D facility will further boost Singapore’s competitiveness in AI technologies and adoption.
“By driving innovation in cutting-edge semiconductor technologies, such a facility can significantly enhance the performance and efficiency of AI systems. This will, in turn, accelerate the integration of AI across various industries, driving Singapore’s economic growth and sustainability efforts,” he said.
He added that such facilities will also attract top talent and encourage collaboration between academia, industry, and government.
Harvey Koenig, Partner and Co-Head of BEPS COE at KPMG in Singapore, added that the S$3 billion NPF top-up will help Singapore stay competitive by offering cash grants and investment credits to attract investors.
PM Wong also addressed concerns that the Singapore Stock Exchange is not attractive enough, even for companies focused on Singapore and Southeast Asia. An Equities Market Review Group was set up to tackle this, and its first set of recommendations has been accepted.
According to Channel News Asia, the recommendations include tax incentives for Singapore-based companies and fund managers that are listed in Singapore and are expanding their business here.
Fund managers who invest heavily in Singapore-listed equities will also get tax breaks to boost public capital markets.
Andrew Thompson, Partner and Head of Private Equity at KPMG Asia Pacific welcomed the initiative, saying it could strengthen Singapore’s public capital markets and reinforce its position as a global and regional financial hub. He added that improving market liquidity would also help home-grown businesses succeed. /TISG
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