Singapore's defense industries were established in the late 1960s because the government believed that the country should not become too dependent on foreign countries to resupply the armed forces during wartime. By 1975 three government-owned corporations were involved in assembling, rebuilding, overhauling, and designing small arms, artillery, armor, military aircraft, and naval vessels. In 1979 the government started a defense marketing effort to promote the sale of Singapore-designed weapons to foreign countries. In addition to government-owned defense industries, a number of foreign-owned producers of military equipment operated in Singapore. These firms were attracted by government incentives designed to promote employment in high technology industries, to lower production costs, and to explore the possibility of using Singapore as a base for promoting the sale of their products in Asia.

In 1989 three divisions of the state-owned and -operated Singapore Technology Corporation were producing various types of ammunition, weapons, and vehicles used by the army. In addition, the divisions were responsible for rebuilding or adapting some types of foreign military matérial to army specifications. The first division, commonly known as Chartered Industries, was established in 1967 and produced various types of ammunition and small arms. Ammunition manufactured included 5.56-, 7.62- and 12.7- caliber shells used in pistols, rifles, and machine guns 60-, 81- and 120mm mortars 75mm armor-piercing rounds for the main gun of the AMX-13 tank and 155mm high-explosive artillery ammunition. In 1970 Chartered Industries began licensed production of the M16 assault rifle. More than 80,000 M16s were manufactured for the army between 1970 and 1979. In 1976 Chartered Industries purchased the rights to the SAR-80 assault rifle from Britain's Sterling Armament Company. Engineers at Chartered Industries worked with a team of weapons experts at the Armed Forces Training Institute to improve the Sterling design. An estimated 100,000 indigenously designed SAR-80s were produced between 1980 and 1989 for domestic use and for export. The second division of Singapore Technology Corporation--Ordnance Development and Engineering--was established in 1973 to design and produce mortars and 155mm howitzers for the army. Three indigenously-designed mortars based on designs provided to the division by a Finnish manufacturer were still in production in 1989 and fired 60-, 81- and 120mm ammunition. The indigenously designed FH-88 155mm howitzer was based on the Israeli-produced M68 that was exported to Singapore in the 1970s. Soltam Limited of Israel no doubt assisted Ordnance Development and Engineering in the development and initial assembly of the FM-88. Automotive Engineering, the third division of Singapore Technology Corporation involved in military production, was established in 1971. The division received a number of foreign-produced vehicles, including three-ton Mercedes transport trucks and the AMX-13 tank, and modified them to army specifications. Additionally, the division modified V-150/V-200 and 1010 M-113 armored personnel carriers to serve as platforms for weapons such as the Bofors RBS-70 surface-to-air missile system and indigenously produced 120mm mortars.

Singapore Aerospace Corporation, established in 1981, comprised four state-owned divisions that were involved in the assembly of foreign-produced trainer aircraft for the air force and the overhaul and maintenance of various types of military aircraft, aircraft engines, and avionics equipment. Between 1984 and 1987, the Maintenance Division assembled at least twenty-six Italianproduced SIAI-Marchetti S-211 trainer aircraft for the air force. The Maintenance Division also overhauled and refurbished A-4S Skyhawk fighter aircraft and performed depot-level maintenance on C-130 transport aircraft for both the Singapore and United States air forces. Singapore Aerospace Corporation could manufacture spare parts for A-4S fighter aircraft, handle routine maintenance on 6,000 types of civil and military aircraft components, and overhaul various types of jet engines.

The state-owned Singapore Shipbuilding and Engineering Company produced naval vessels under technology transfer agreements negotiated with Lürssen Werft of West Germany. In 1974 and 1975, the company constructed four TNC-45 missile-equipped gunboats for the navy based on Lürssen-designed Zobel-class torpedo gunboats. The West German design was modified to allow for the installation of Israeli-produced Gabriel missiles and a larger gun. The agreement with Lürssen included marketing rights, and Singapore Shipbuilding and Engineering constructed lightly armed gunboats for at least two Asian countries. In 1976 and 1977, the company built three TNC-45s for the Thai navy. These vessels had the same armament as the TNC-45s produced for the Singapore navy. In 1986 Singapore Shipbuilding and Engineering negotiated an agreement with the Indian government that provided for joint construction of six TNC-45s for the Indian Coast Guard. Two of these craft were to be built in Singapore and four in India. In 1989 Singapore Shipbuilding and Engineering constructed the first of five corvettes for the navy. Again, Lürssen Werft provided the design and one prototype vessel, and Singapore Shipbuilding and Engineering modified the design to navy specifications. The modification involved replacing surface-to-surface missiles with American-produced Harpoon ship-to-ship missiles. Both the Singapore and West German models of this craft were equipped with one 76mm gun (see table 14, Appendix).

Between 1983 and 1987, Singapore exported US$311 million worth of weapons and military equipment to other countries. According to the Stockholm International Peace Research Institute, Singapore was the fifteenth largest exporter of military hardware to Third World nations during the period. These weapons and equipment sales increased from only US$1 million in 1983 to US$125 million in 1987 and were believed to have been limited to the same types of ammunition, small arms, and mortars that were produced for the army. The government marketed its military equipment through its own brokerage firm, Unicorn International.

Data as of December 1989