US MNC: We Didn't Fxxx SG for FREE. EDB: Agreed...

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An honorable member of the Coffee Shop Has Just Posted the Following:

Broadcom & EDB deny Broadcom is leaving SG

September 7th, 2014 | Author: Editorial

It was earlier reported that large American chipmaker and Fortune 500 company, Broadcom, is starting to move some of its operations out of Singapore to Ireland (‘Large US MNC shifts operations out of Singapore‘).

In its latest annual report, Broadcom said that it would “utilise (its) Irish trading company for certain foreign operations”.

Broadcom has reportedly decided to shift some operations out of Singapore when the Economic Development Board’s tax incentives ended this year.

The tax incentives helped reduce Broadcom’s Singapore taxes by a massive US$423 million last year and by US$399 million in 2012. The savings were considerable given that the net earnings of Broadcom were US$424 million last year and US$719 million in 2012. Without the EDB’s tax incentives, Broadcom would not have made any profits last year.

Broadcom said the move to Ireland “would result in a similar foreign tax provision as our current Singapore tax incentive”. The relocation is not expected to have a “material effect on operating results and tax expenses, or on customers or suppliers.”

Yesterday (6 Sep), writing in ST Forum, Mr Giuseppe Miano, Broadcom Vice-President of Asia-Pacific Operations and Managing Director of Singapore, assured the public that Singapore “continues to be an essential location for Broadcom’s research and development, logistics and other support services”.

“Broadcom has contributed significantly to the country’s economic development for more than 15 years, and is dedicated to increasing investment here.”

He said that Broadcom supports the local school system as part of their efforts to cultivate future innovation leaders here.

He said, “Besides partnering the Economic Development Board, local government agencies and industry leaders, Broadcom is engaged with schools and education leaders to promote Stem (Science, Technology, Engineering and Mathematics) education.”

“Singapore remains a strategic market for Broadcom, and we are strongly committed to growing our business in this country, and continuing to work with our third-party manufacturing suppliers here for years to come,” he added.

EDB says Broadcom exploring new areas to invest in Singapore

Meanwhile, EDB Assistant Managing Director, Lim Kok Kiang, also wrote in to ST Forum yesterday to assure the public that Singapore’s electronics industry remains globally competitive and that wafer fab production levels were at a record high in the second quarter of this year, despite Broadcom’s move.

“We expect total manufacturing output to grow this year compared to last year,” he said.

“While there have been some recent consolidations and retrenchments, these are in line with the electronics industry’s transformation towards higher value-added activities.”

As an indicator of an industry’s competitiveness, Singapore’s electronics industry was able to attract more than $16 billion in investments over the last 3 years, which helps create 7,700 skilled jobs when the investments are fully realised, said Mr Lim.

=> How much of these $16B are actually grants from SG aka taxpayers' $? How many SGs are being hired?

“Through high-value-added components manufacturing, research and development, and headquarters activities, the industry creates good-paying jobs for Singaporeans,” he added.

Mr Lim explained that multinational corporations make decisions to shift their operations across different countries for various reasons.

“Despite the ongoing transformation in the electronics industry, leading global companies continue to grow their activities in Singapore. These include Broadcom, which still maintains significant operations and is exploring new areas to invest in Singapore,” he said.

Moving forward, Mr Lim said that EDB has positioned Singapore to capture new opportunities from the global trends of the internet and cloud computing by building capabilities in power management, communications, sensors and storage technologies.

“More than $500 million of investments in these areas have been announced this year from leading electronics companies such as MediaTek, International Rectifier and AFPD, which will create more than 500 new jobs. The EDB expects to see more of such investments in the near future,” he said.

“Our long-term outlook for the industry remains positive as we continue to attract exciting new electronics investments,” he concluded.


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