In a significant diplomatic development, Singapore has emerged as the only Southeast Asian nation to join the Pax Silica Declaration, a strategic agreement led by the U.S. This declaration marks a partnership with key allies, including Australia, the U.K., and Israel, focused on artificial intelligence (AI) and semiconductor production.
Southeast Asia’s Role in AI and Semiconductors
Despite growing trade relations between the U.S. and ASEAN countries like Thailand and Vietnam, Singapore’s participation highlights its unique position in the AI landscape. Ruben Durante, a professor at the National University of Singapore (NUS), noted that Singapore possesses the attributes that make it a ‘trusted node’ for the U.S. to anchor AI supply chains. This includes:
- Strong governance and regulatory credibility
- Advanced capital markets
- Top-notch logistics
- Robust data center and connectivity infrastructure
Historically, Singapore has been a hub for semiconductor manufacturing, starting with the establishment of National Semiconductor in 1968. Currently, the country is responsible for approximately 10% of global chip production.
Investments in AI and Technology
Recently, Singapore has positioned itself to become a leading AI nation by investing in workforce training and encouraging local AI development. These efforts have attracted billions in investments from major tech companies, including Amazon and Google, particularly for cloud computing and data centers.
Joining Pax Silica grants Singapore a pivotal role in U.S. discussions regarding chip production and logistics. Atreyi Kankanhalli, a computing professor at NUS, emphasizes that this partnership offers a safety net against supply disruptions while providing access to cutting-edge AI technologies.
Geopolitical Context of Pax Silica
The introduction of Pax Silica occurs against a backdrop of heightened competition between the U.S. and China. The U.S. has prohibited advanced processor sales to China since 2022, while China has imposed export controls on rare earth materials essential for semiconductor manufacturing.
According to Simon Chesterman, a law professor at NUS, the evolving AI competition is not just about data; it hinges on physical assets like chips and energy supplies. Other participating countries in the Pax Silica agreement include Japan and South Korea, notable for their semiconductor industries, and Australia, which is vital for sourcing critical minerals.
Future Expansion of Pax Silica
Experts suggest that the U.S. may soon expand its inner circle of Pax Silica members. Countries like the Netherlands and the United Arab Emirates have participated in preliminary discussions and may be considered for future inclusion. Durante indicates that the expansion will depend on establishing concrete mechanisms for cooperation, such as financing and standards development.
While other Southeast Asian nations aspire to enter the AI supply chain, they face challenges related to infrastructure and talent dispersion. However, with increasing efforts in countries like Vietnam and Malaysia to develop their semiconductor and data center capacities, the landscape may shift.
In summary, Singapore’s pivotal role as Southeast Asia’s sole participant in Pax Silica illustrates its strategic importance in the AI era, positioning it as a critical hub in the global technology supply chain.
