SEMICONDUCTOR test solutions provider AEM Holdings may be in for a tough year, analysts said, after major customer Intel provided guidance that fell short of expectations.

Chipmaker Intel said on Thursday (Jan 25) that its revenue for the first quarter of this year is likely to be between US$12.2 billion and US$13.2 billion.

The projection was below the US$14.15 billion estimate of data provider LSEG (formerly Refinitiv). Shares of US-listed Intel fell more than 5 per cent immediately after the announcement, and continued their descent on Friday.

Sales of PCs and laptops, which Intel chips are mostly used for, have slowed.

Intel’s weak forecast comes shortly after AEM reported an estimated S$17.9 million to S$25.1 million shortfall in its inventory on Jan 14, following an internal stocktaking exercise.

“The company, in consultation with its independent external auditors, has made a determination that the entirety of the S$18 million to S$25 million will be adjusted down in Q4 FY2023,” AEM said on Jan 22.

GET BT IN YOUR INBOX DAILY

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

Sign UpVIEW ALL

DBS Group Research, in a note to clients on Friday, said the overhang from the inventory shortfall incident and the lack of strong catalysts are likely to keep the stock “range bound” for now. The brokerage has a “hold” call on AEM shares with a target price of S$3.

Lim & Tan Securities also issued a note on Friday highlighting the potential negative impact of the Intel news.

Given the “uncertain earnings trajectory”, Lim & Tan said, the stock price is “not attractive enough to entice bottom-fishing yet”.

AEM ended Friday at S$2.80, down S$0.06 or 2.1 per cent.