SINGAPORE: US chipmaker Xilinx has expanded its operations in Singapore with a new US$40 million facility at Changi Business Park.

It also plans to pump in US$20 million over the next few years in research and development for the next generation chips.

It will be the first time that such R&D is taking place in South-east Asia and this comes as a boost for the Singapore semiconductor industry which experienced a slowdown last year.

Singapore started growing its semiconductor industry 30 years ago and right now it is a significant player, with 10 per cent of the world's foundry wafer output being produced here.

Speaking at the opening of Xilinx's new premises, Trade and Industry Minister Lim Hng Kiang noted that the industry is now more vertically integrated than before.

"Today, we have 40 IC design companies, 20 chip assembly and test plants, and 14 silicon wafer fabrication facilities. Over the next few years, we will see a few more wafer fabrication plants starting up," he said.

The semiconductor industry in Asia-Pacific excluding Japan is forecast to grow some 50 per cent over a five-year period to US$206 billion in 2011, from US$134 billion in 2006.

For Xilinx, shipments from the region have grown by 75 per cent from around US$375 million in FY 2006 to over US$675 million in FY2007.

Xilinx specialises in chips known as programmable logic devices which are used in products from MP3 players to navigation systems.

It is expanding its operations here to have better access to its Asia-Pacific customers.

Sales in this region account for nearly 40 per cent of its total revenues in FY 2007 and Xilinx is expecting this to jump to more than 50 per cent in a few years.

Xilinx says that it is looking to use more of its Asia Pacific Venture Capital Fund to invest in smaller Asian companies.

Jon Olson, Senior Vice President of Xilinx Inc, said: "We have a number of opportunities that we're looking at for smaller companies that are assisting us with the ecosystem development that make it easier to use our devices in a variety of different applications. So we're definitely going to invest more of that fund in Asia."

Besides the current investment, the company has also set up a research centre at Republic Polytechnic - costing US$100,000 - which will train more than 150 students a year.