You are here
AEM, UTAC to co-develop new test systems for image sensor chips
MAINBOARD-LISTED AEM Holdings and Singapore-headquartered UTAC Holdings on Tuesday announced a plan to jointly develop next-generation, cost-effective test system solutions for complementary metal-oxide semiconductor (CMOS) image sensor products.
CMOS image sensors provide the camera function in electronics such as smartphones, computers, cars and closed-circuit televisions.
AEM provides advanced chip testing solutions, while UTAC has been offering CMOS image sensor assembly and test services in Singapore for many years.
According to both companies, CMOS image sensor products are estimated to grow significantly for the foreseeable future, due to growing demand from the security, automotive safety, autonomous vehicles and industrial application fields.
AEM president Chandran Nair said that the collaboration would provide semiconductor companies with cost-effective, application-specific test solutions that are scalable and adaptable for future product lines.
The partnership also "sets the foundation for increased cooperation and future growth for both companies", he added.
Earlier in April, AEM posted a net profit of S$36.1 million for its first quarter ended March 31, up from S$6.6 million a year ago.
The company said that the coronavirus-driven shift to telecommuting and virtual learning resulted in an increased demand for semiconductor chips for servers, personal computers and notebooks.
In its outlook, the group put its revenue guidance for the year at between S$360 million and S$380 million.
It added that its advanced semiconductor testing solutions placed it in an "advantageous position" in these critical times.
AEM chairman Loke Wai San told The Business Times last month that the group's positive position for 2020 was a result of continuous growth since 2017, when AEM developed a next generation test handler with its key customer.
Although not disclosed by AEM, most research reports suggest that this customer is semiconductor giant Intel Corporation. The customer contributes over 90 per cent of AEM's revenue.
In a research note published on May 18, Maybank Kim Eng analyst Lai Gene Lih said that he remained positive towards AEM's 2021 prospects due to Intel's decision to proceed with "leading edge investments".
"Intel... emphasised that spending for 10, 7 and 5 nanometer (semiconductor chips) will be on schedule. This is important as we see new Intel products as a key driver of AEM's prospects," he wrote.
KGI Securities analyst Kenny Tan noted in a research note on May 17 that AEM had updated its revenue guidance to between S$430 million and S$450 million, which he attributed to "continued orders from the key customer".
"The tech sector, semiconductor industry included, has generally weathered the Covid-19 crisis fairly well... results across test equipment peers have largely been positive, in line with strong demand for high-end testers," he said.
Mr Tan added that AEM was "well-positioned to capture a substantial portion of market share" as it starts to make inroads into outsourced semiconductor assembly and test providers (third party vendors who perform semiconductor assembly, packaging, and testing), who are also its potential customers.
Shares of AEM closed on Tuesday at S$3.11, up S$0.09 or 3.0 per cent.