TAIPEI – Just two years ago, the Singapore branch of Taiwan’s Cathay United Bank had a workforce of some 100 employees. In 2025, it is set to double that headcount.
The growth reflects not only how the bank’s own investments in the Lion City have increased, but that there is strong demand from its Taiwanese customers to expand their presence in the region amid geopolitical tensions and a realignment in global supply chains which have largely benefited South-east Asia.
Specifically, Singapore is an ideal gateway to the rest of the region, said Mr Winfield Wong, chief executive of the bank’s Singapore unit.
“Taiwanese businesses see Singapore as a good base for foreign exchange trading, facilitating their development in the manufacturing hinterland in wider South-east Asia,” he told The Straits Times.
“By leveraging Singapore’s international environment, Taiwanese businesses are able to use Singapore as a test bed for new initiatives which can be implemented at scale across South-east Asia,” he said, adding that Singapore’s competitive workforce also makes it an attractive investment hub.
Countries in South-east Asia have seen a surge in investment from Taiwan in recent years as uncertainties over the US-China trade war and frosty cross-strait relations have pushed Taiwanese companies to continue diversifying away from China.
Singapore, in particular, has emerged as Taiwan’s top investment destination among Asean countries, with more than two-thirds of Taiwanese investments in the bloc flowing into the city-state.
According to Taiwan’s Ministry of Economic Affairs, Taiwanese companies’ investments in Singapore reached US$5.81 billion (S$7.87 billion) in 2024. This was the first time Taiwan’s investments in the Republic surpassed those in China – US$3.65 billion – since 1991 when comparable data became available.
An overwhelming 87 per cent of Taiwanese investments in Singapore in 2024 went to electronic parts and components manufacturing, which includes chip fabrication. Another 10 per cent were directed at the financial and insurance sector.
Taiwan’s second-largest chipmaker, United Microelectronics Corporation (UMC), for instance, is set to begin commercial production at its new Singapore fabrication plant in 2026, manufacturing chips that power smartphones, cars and edge artificial intelligence, among other things.
The US$5 billion facility, which sits next to the company’s existing plant in Pasir Ris, “significantly expands UMC’s footprint in Singapore and is set to generate numerous high-value jobs locally”, a company spokesperson told ST.
“The facility also boasts UMC’s largest research and development centre outside of Taiwan, with a strong focus on speciality technologies and advanced packaging,” the spokesperson added, describing Singapore as “a very important hub for the company”.
Over in Tampines, Vanguard International Semiconductor Corp, which is backed by Taiwan Semiconductor Manufacturing Co, and Dutch chip designer NXP Semiconductors broke ground in December 2024 on a factory that makes 12-inch wafers. Production at the US$7.8 billion plant is slated to begin in 2027.
Dr Chiang Min-hua, an economist and a non-resident senior fellow at the University of Nottingham’s Taiwan Research Hub, said it makes sense for Taiwanese companies to relocate some of their chip fabrication capacity to Singapore given the city-state’s position as a key high-tech manufacturing hub in the region.
“Taiwan’s high-tech investment in Singapore could complement the low-tech investment in other South-east Asian countries, and facilitate the operation of a regional production network,” she said.
Ms Kristy Hsu, director of the Taiwan Asean Studies Centre at Chung-Hua Institution for Economic Research in Taipei, said the country’s position as an Asian financial centre also makes it attractive for Taiwanese wealth management players, who see Singapore as “reliable and politically stable”.
Most of Taiwan’s major banks have a presence in Singapore – besides Cathay United Bank, others include Taipei Fubon Bank and E.Sun Commercial Bank.
Previously, ST reported on how Singapore has seen an upsurge in interest from Taiwan’s ultra-wealthy to set up family offices to protect their wealth.
ST has contacted Singapore’s Economic Development Board (EDB) for comments on why the Republic remains an attractive investment destination for Taiwan. An EDB spokesperson previously told this paper that “Singapore offers global businesses stability alongside clear policies and transparent regulatory practices; connectivity to a fast-growing South-east Asia market to access new opportunities and strengthen supply chain resilience; a vibrant innovation ecosystem with ready partners and strong intellectual property protection; and a skilled workforce”.
China was once Taiwan’s top investment destination, accounting for 84 per cent of Taiwanese foreign direct investments at its peak in 2010.
That has since plummeted to only 8 per cent in 2024, as a mix of Covid-19 pandemic disruptions, national security concerns, and trade tensions have spurred the business strategy known as “China plus one”, where companies diversify manufacturing or sourcing operations by maintaining a presence in China while expanding into other countries.
For many Taiwanese firms, South-east Asia is deemed a strong alternative due to its young and growing population and, in most territories, comparatively lower labour costs.
As for Singapore, it stands out for its “politically neutral position, efficient processes and infrastructure, and strong rule of law”, said Ms Catherine He, head of research for Singapore at investment management firm Colliers.
“In addition, Singapore is relatable to the Taiwanese in terms of culture, such as language,” she added.
Analysts said this trend will certainly continue now that US President Donald Trump has returned to the White House, given his transactional foreign policy.
Said Ms He: “Trump’s support of Taiwan is more conditional on its financial and defence commitments to the US, than resolute. Therefore, Taiwan will have to hedge against any geopolitical uncertainty at home and diversify supply chains from China.”
Mr Trump has threatened tariffs of up to 100 per cent on semiconductors from Taiwan – of which it is a leading manufacturer – and has previously suggested that Taipei should pay for Washington’s protection.
He has also imposed 10 per cent tariffs on all Chinese imports, announced on Feb 1, a move which spurred Beijing to retaliate with a broad package of economic measures targeting the US.
“The Trump administration is unlikely to soften its policy towards China, and China’s slowing economy and the tense relations across the strait also make it a less ideal place to invest in,” said Dr Chiang, the economist.
“Taiwan’s investment shift away from China will continue.”
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