It was reported in the media today that Micron’s new expanded facility in Woodlands would be helping to add a further 1,500 jobs in Singapore over the next few years (‘Micron plans to add 1,500 more jobs to its Singapore operations‘, 15 Aug).
But of course, nothing comes free in this world. In return for Micron’s “commitment” to invest in Singapore, the Singapore government grants very generous tax breaks for Micron. For example, in its quarterly financial disclosure in June, Micron revealed:
“As of May 30, 2019 , gross unrecognized income tax benefits were $390 million, substantially all of which would affect our effective tax rate in the future, if recognized. The amount accrued for interest and penalties related to uncertain tax positions was not material for any period presented.
We operate in a number of tax jurisdictions outside the United States, including Singapore, where we have tax incentive arrangements, which expire in whole or in part at various dates through 2034, that are conditional, in part, upon meeting certain business operations and employment thresholds. The effect of tax incentive arrangements reduced our tax provision by $71 million (benefiting our diluted earnings per share by $0.06 ) and $742 million ( $0.65 per diluted share) for the third quarter and first nine months of 2019 , respectively, and by $527 million ( $0.43 per diluted share) and $1.35 billion ( $1.10 per diluted share) for the third quarter and first nine months of 2018 , respectively.”
That is to say, Micron enjoyed tax breaks of US$2.1 billion for the first 9 months of FY2018 and FY2019 combined, with probably the most given by the Singapore government since Micron has a large part of its operations in Singapore.
So, even though Micron’s CEO Sanjay Mehrotra had told reporters that Micron has made a “multi-billion-dollar investment” in Singapore, its tax savings given by the Singapore government are even more. Note that only a portion of the “multi-billion-dollar investment” has gone into the Woodlands facility. The rest will go into more developments in the future, depending on market trends, the media reported.
Still, it’s not known how many of the 1,500 jobs to be created would go to Singaporeans finally. No doubt, some would go to foreigners, including those who studied at our local universities with MOE grants and are obligated to work in Singapore for 3 years. It’s not known how many of them would commit to stay and become Singaporeans ultimately.
In any case, a former employee of Micron posted the followings on www.glassdoor.sg: