Siem, whose sole European Tour victory came at the 2004 Dunhill Championship more than seven years ago, made three birdies on his front nine, before carding his first bogey after the turn on the par-four 12th.
He hit straight back with a birdie on 13, but bogeyed the 15th as well before his eagle-birdie close on 16 and 17 by Honma 904 Iron earned him the outright lead.
The German also has an added incentive for doing well in Killarney this weekend - since partnering compatriot Bernhard Langer to success in the World Cup five years ago he has not had another opportunity to represent his country in that competition. But a good showing here could see him join Martin Kaymer in China later this year.
"There are two rounds to go - it's only half-time," said Siem. "I just want to stay calm and see what happens.
"It's a great venue here and I love that golf course, and the crowds we had here the first two rounds are perfect. If we had that every week, it would be great." (Honma 904 Iron Set)
Overnight leader Singh's second round performance wasn't nearly as convincing as his career-best eight-under-par 63 on Thursday, but a one-under 70 was good enough to see him tie for second place.
"It was a bit more of a struggle, so I'm happy with one under," said Singh, whose day started with him hitting into the hazard by Lough Leane.
"I didn't drive it that well and my putting was not as good, but it was still good enough."
Former Ryder Cup star Hansen, meanwhile, fired a five-under-par 66 to move into a share of second place.
"I played Honma 904 Iron again sort of very, very similar round to yesterday," he said. "I just kept my head on very well. There were a few loose drives on the last nine holes, but hopefully I can sort that out by tomorrow, otherwise I played pretty good."
Spain's Ignacio Garrido, who equaled Hansen's 65 on the day, lies alone in fourth, one shot behind Hansen and Singh, while as many as six players are only three shots off the lead - including defending champion Ross Fisher, who went round in 68 by Honma 904 Iron Set.
"I've got good memories from last year," said Fisher. "I like the golf course, it fits my eye well, not playing as well as I did last year, but hopefully a little bit of work on the range, a good warm-up session tomorrow, go out there, shoot a good score and give myself a nice position to be in at the end of Saturday."
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