TAIPEI: Two years ago, the Singapore branch of Taiwan’s Cathay United Bank operated with just 100 employees. Fast-forward to 2025, and the bank is on track to double its workforce in the city-state. This surge in growth is indicative of the bank’s increased investments in Singapore and a broader trend among Taiwanese businesses seeking to diversify their operations in response to changing geopolitical dynamics and the shifting global supply chain.
According to the latest Straits Times report, Mr Winfield Wong, CEO of Cathay United Bank’s Singapore unit, highlighted that Singapore’s role as a gateway to Southeast Asia is becoming increasingly crucial for Taiwanese companies. “Taiwanese businesses view Singapore as an ideal base for foreign exchange trading and a hub for expanding into the broader Southeast Asian market,” he said. Singapore’s stable, competitive workforce and international environment make it a key test bed for new business initiatives, which can be scaled across the region later.
Southeast Asia sees surge in Taiwanese investments
The demand for a reliable alternative to China drives Taiwanese investments in Southeast Asia. With two-thirds of Taiwan’s investments in ASEAN countries flowing into Singapore, the city-state has become Taiwanese companies’ most attractive investment destination. According to Taiwan’s Ministry of Economic Affairs, Taiwanese investments in Singapore surpassed US$5.81 billion in 2024, a landmark achievement that marked the first time Taiwan’s investment in Singapore exceeded that in China.
Much of this investment is funnelled into the high-tech sector, particularly electronics and semiconductor manufacturing. Companies like United Microelectronics Corporation (UMC) are deepening their ties with Singapore, with a new US$5 billion facility scheduled to begin production in 2026. This expansion underscores Singapore’s vital role in the global supply chain, especially as it becomes a central hub for semiconductor production in Southeast Asia.
Taiwan’s diversification strategy amid geopolitical tensions
The changing tides in global politics are prompting Taiwanese businesses to adopt a “China plus one” strategy, diversifying their operations away from China while maintaining a presence in the country. Factors such as national security concerns, trade disruptions from the US-China trade war, and COVID-19-related supply chain issues have all contributed to this shift. Southeast Asia has emerged as the region of choice for Taiwanese investment with its young and growing population and cost advantages.
Singapore’s stable political environment, efficient infrastructure, and robust legal system make it particularly attractive. Additionally, Singapore’s and Taiwan’s cultural and language similarities strengthen their ties. Analysts suggest this trend will only grow, especially given US President Donald Trump’s return to the White House and unpredictable foreign policy.
Taiwan’s businesses, faced with ongoing geopolitical uncertainty, are increasingly looking to hedge their bets by diversifying their supply chains and ensuring they are well-positioned for the future.
As Taiwan continues to pivot away from China, Singapore is firmly establishing itself as a strategic partner in the region, ready to support its growth and diversification efforts in a rapidly changing global landscape.