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SEOUL: The South Korean government has announced a significant boost in support for its critical semiconductor sector, raising its industry package to 33 trillion won (US$23.25 billion or RM102.6 billion), up from 26 trillion won a year earlier. The increase comes as global chipmakers face mounting geopolitical and economic headwinds, including uncertainty over US trade policies and intensifying competition from China. In a joint statement issued on Tuesday by several ministries, including the Ministry of Trade, Industry and Energy, the government outlined its commitment to reinforcing the financial backbone of South Korea’s chipmakers. Notably, financial assistance under the programme will grow to 20 trillion won from the previously announced 17 trillion won, providing much-needed capital to an industry grappling with rising production costs and a shifting global landscape. This strategic move highlights Seoul’s intent to secure its position in the global semiconductor value chain. Although South Korea leads in memory chip production through major players such as Samsung Electronics and SK Hynix, the nation has lagged behind in areas like chip design and foundry services, where firms from the United States and Taiwan currently dominate. Semiconductors remain a cornerstone of South Korea’s economy. In 2024, chip exports totalled US$141.9 billion, representing 21% of total national exports. China and the United States remain the largest markets, with shipments valued at US$46.6 billion and US$10.7 billion respectively. The announcement also comes amid renewed trade tensions. US President Donald Trump stated over the weekend that his administration would soon reveal new tariff rates on imported semiconductors, with potential exemptions for select companies. This has prompted concerns across global supply chains and accelerated calls for stronger domestic industrial support in South Korea. The latest chip package follows a similar initiative targeting the automotive sector, which also faces tariff pressures from the US. Last week, Seoul revealed emergency measures to cushion the automotive industry, including financial aid, tax incentives, and subsidies to stimulate local demand. The government has also pledged to engage in active dialogue with Washington to mitigate the impact on key Korean exports. By reinforcing its high-tech sectors, South Korea is positioning itself to navigate a more protectionist global trade environment while maintaining its status as a key player in the semiconductor race.

SINGAPORE: Japanese rubber futures rose sharply on Monday, buoyed by growing supply concerns from Thailand and a global sigh of relief following the US government’s decision to exempt key electronics from fresh tariffs. The Osaka Exchange (OSE) rubber contract for September delivery jumped 5.9 yen, or 1.98%, to 303.5 yen (US$2.13) per kg by 2:22 a.m. GMT. Similarly, gains were seen in China’s futures markets: The Shanghai Futures Exchange (SHFE) rubber contract for May delivery rose 310 yuan, or 2.09%, to 15,135 yuan (US$2,072.35) per metric ton. The most active butadiene rubber contract for May delivery increased 130 yuan, or 1.12%, to 11,765 yuan (US$1,610.92) per ton. The upward pressure follows weather warnings from Thailand’s Meteorological Department, which forecast thunderstorms and heavy rain in the south from April 14 to 19. The adverse weather is expected to impact rubber output, tightening supply from the world’s largest producer. Boosting global sentiment, US President Donald Trump’s administration announced tariff exemptions on smartphones, computers, and other electronics—key products in global trade. This move helped Japan’s Nikkei Index climb 2% and supported broader optimism in Asian markets. The Japanese yen weakened 0.2% to 143.79 per US dollar, improving the attractiveness of yen-denominated commodities for foreign investors. Despite the temporary reprieve in tariffs, analysts remain cautious. China’s economy appears to be slowing, with growth projections for 2025 expected to fall below last year’s pace, according to a Reuters poll. Uncertainty over long-term US-China trade relations continues to weigh on market sentiment. On the Singapore Exchange (SICOM), the May rubber contract last traded at 171 US cents per kg, up 0.9%.

Singapore’s central bank has eased monetary policy for the second consecutive time, citing growing risks to the global economy and a weaker outlook for domestic growth in 2025. The Monetary Authority of Singapore (MAS) announced on Monday that it would reduce the slope of its exchange rate policy band — its primary tool for managing monetary conditions — while keeping the band’s width and centre unchanged. The move was widely anticipated by economists and follows a similar policy adjustment in January, ending a long pause that began in 2023. In its statement, MAS warned of “significant ramifications” for Singapore’s economy if global trade continues to deteriorate. “There are downside risks to Singapore’s economic outlook stemming from episodes of financial market volatility and a sharper-than-expected fall in final demand abroad,” it said. The warning comes as global uncertainty mounts, particularly in response to US President Donald Trump’s planned wave of tariffs. Trump reaffirmed over the weekend that levies on electronics would go ahead, despite a short-term exemption, fuelling volatility in financial markets and concern among trade-dependent nations like Singapore. Reflecting these concerns, Singapore’s Ministry of Trade and Industry has downgraded its 2025 growth forecast to a range of 0% to 2%, down from 1% to 3%. The economy expanded 3.8% year-on-year in the first quarter, falling short of expectations for a 4.5% increase. The MAS highlighted Singapore’s vulnerability due to its high dependence on global trade and integration with global supply chains. “Slowing global and regional trade as well as heightened policy uncertainty will weigh on the external-facing sectors, which could spill over into the domestic-oriented sectors,” the central bank stated. While Singapore was hit with a 10% US tariff — less severe than China’s 125% — the impact remains significant for its export-driven economy. Prime Minister Lawrence Wong has cautioned that growth may be “significantly impacted” and the risk of recession cannot be ruled out. Following the MAS decision, the Singapore dollar edged slightly higher. It has risen about 3.7% against the US dollar so far this year, second only to the Japanese yen among Asian currencies, as investors respond to tariff uncertainties. Selena Ling, Head of Research and Strategy at Oversea-Chinese Banking Corp, noted that further policy easing could be on the horizon. “Reciprocal tariffs are currently still in play, with sectoral tariffs possibly to come. So a further downshift in growth and inflation could prompt further monetary policy easing, but fiscal policy will also come into play,” she said. “A technical recession is possible.” Singapore manages monetary policy through its currency, allowing the Singapore dollar to move within an undisclosed trading band. The MAS can adjust the slope, centre, or width of the band to influence the pace of the currency’s appreciation or depreciation. Inflation pressures have cooled markedly in recent months. Core inflation — which excludes accommodation and private road transport costs — slowed to 0.6% in February, the lowest since June 2021. It marked the fifth consecutive month of easing. Looking ahead, MAS expects core inflation to average between 0.5% and 1.5% in 2025, down from its earlier forecast of 1% to 2%. The next core inflation data is scheduled for release on April 23.

WASHINGTON: US President Donald Trump’s ambition to see iPhones manufactured on American soil is clashing with the stark realities of global supply chains and decades of industrial evolution. Although Apple Inc. has pledged to invest US$500 billion in the US over the next four years and the Trump administration plans to impose tariffs of up to 145% on Chinese imports, experts say the idea of domestically produced iPhones remains unrealistic in the foreseeable future. The US lacks the complex ecosystem that supports iPhone production—one that includes a vast network of specialised suppliers, engineering talent, and logistical infrastructure found in Asia, particularly China. “Boston is over 500,000 people. The whole city would need to stop everything and start assembling iPhones,” said Matthew Moore, a former Apple manufacturing engineer. “Millions of people are employed by the Apple supply chain in China.” The Scale Problem Apple’s Chinese manufacturing facilities are enormous. The Zhengzhou complex, dubbed “iPhone City,” employs hundreds of thousands and operates like a self-contained town—with dormitories, schools, gyms, and hospitals. Replicating such a setup in the US would be unprecedented. Meanwhile, Apple’s partners are building the world’s second-largest iPhone facility in India. The country is rapidly becoming a key production hub, now producing an estimated 35 million iPhones a year, enough to meet a large share of US demand. Skills Gap and Supply Chain Challenges Apple CEO Tim Cook has long argued that China’s advantage lies not in low labour costs, but in its concentration of skilled engineers and tooling experts. As early as 2017, Cook pointed out that the US lacked the number of tooling engineers needed even to fill a room, while China could fill football fields. Moreover, Apple’s complex supply chain relies on thousands of components and partners primarily based in Asia. Even the Mac Pro, assembled in Texas, relies on parts manufactured in China. Automation Isn’t the Answer – Yet While some suggest that Apple could sidestep labour shortages by building a fully automated, robotic plant in the US, industry experts say automation can’t yet match the adaptability or precision of human workers—especially when product designs and materials are constantly evolving. “You design the thing, rebuild the factory, and then you only have six months to sell it,” said a source familiar with Apple’s supply chain. “The pace of change makes it so much harder to automate.” Diversification, Not Repatriation Apple has been steadily reducing its reliance on China, shifting some production to countries like Vietnam, Malaysia, and Thailand—for devices like AirPods, Macs, and iPads. But for the iPhone, which sells over 220 million units annually and comes in multiple configurations, China’s scale remains unmatched. Even in India, Apple’s largest alternative production site, it has taken a decade to reach meaningful output levels. For now, while Indian-made iPhones are increasingly shipped to US shelves to circumvent tariffs, the dream of a fully American-made iPhone remains just that—a dream.–BLOOMBERG