Electronics sector at risk as global IT firms restructure

Consolidation is key to cutting costs.

Singapore's electronics sector might be under threat from corporate realignments at multinational IT firms.

In its semi-annual Macroeconomic Review, the Monetary Authority of Singapore (MAS) noted that restructuring among large IT companies could lead to manpower and cost rationalisations across the firms' global operations as they seek to reap cost efficiencies from economies of scale.

The MAS cited high-profile restructuring moves such as those by semiconductor manufacturers Infineon, Avago and MediaTek, as well as by PC giants Hewlett-Packard and IBM.

"Singapore, being a key node in the regional IT supply chain, is likely to be affected by these corporate realignments," stated the MAS.

"The net outcome of these global manoeuvres is still unfolding. While Singapore’s electronics sector has seen consolidation of some firms, particularly on the production front, other firms have benefited from the switch towards the newer high-growth areas," the report added.