By Francis Chan

MANUFACTURING firms, hit hard by the global slowdown, can draw on their own technical know-how as a way to diversify and pursue new businesses, said Spring Singapore chairman Philip Yeo.

He said that instead of adopting a wait-and-see survival approach, global semiconductor companies are already diversifying into the emerging solar energy sector.

'How are they making this market switch? The answer lies in their manufacturing know-how,' said the former chairman of the Agency for Science, Technology and Research.

Mr Yeo was speaking at the launch of Manufacturing Integration Technology's (MIT) new solar business unit at Techplace II in Ang Mo Kio yesterday.

He said companies like MIT know how to 'shape and slice' silicon, the key ingredient in solar modules.

And by offering solar cell manufacturers faster, cheaper and proven manufacturing methods, MIT can in turn boost output and drive costs down to meet the growing demand.

'There are signs of recovery today. But much of the recent increase in demand may be due to a case of inventory replenishment rather than a real demand - although there are still opposing views,' Mr Yeo said.

'Our SMEs must focus on the long term by investing in the development of appropriate R&D capabilities, master new processes and acquire new capabilities to meet stringent industry requirements.'

MIT yesterday launched its new series of solar manufacturing equipment called the LS800.

This new line of hardware will provide the company with new revenue streams to moderate the effects of the cyclical nature of the semiconductor industry, said Mr Yeo.

The economic downturn has greatly affected the local manufacturing sector due to the global demand drought.

But MIT chairman and chief executive Tony Kwong said the new solar business unit is aimed at tapping the emerging renewable energy industry.

'We believe this complements well with our Singapore Government's push to develop the clean energy sector with an emphasis on the solar industry,' he said.

According to Mr Kwong, solar power technology or photovoltaics industry production in 2007 grew by more than 60 per cent to a €14 billion (S$28.9 billion) business, and over the last five years has averaged more than 40 per cent in annual growth.

'Business analysts predict the market volume to increase to €40 billion in 2010,' he said.

The firm, which employs about 160 people, has started marketing its new business, with many potential clients at its official launch yesterday.

Mr Kwong said that in addition to the 4,000 sq m plant at Techplace II, and its 3,300 sq m facility in Shanghai, MIT also plans to acquire more space 'as and when production demand grows'.

This article was first published in The Straits Times.