The supply of fresh water is critical for Singapore, which relies on neighboring Malaysia for half of its needs.
Hyflux said it had developed a water generator, known as "Aquosus" that sucked in humid air and put it through the company's proprietary filtration system to create drinking water.
"It makes water out of thin air," Olivia Lum, Hyflux's chief executive said. "It sounds impossible but we have made it possible."
Hyflux said commercial production of its water generator that can be placed in homes and offices to produce up to 20 liters of water daily would start in mid-2003.