AEM shares continue fall; CSE tumbles 7.2%

[SINGAPORE] A chip stock sell-off in Singapore deepened on Wednesday (Oct 14) as AEM Holdings shares continued falling, with peers also affected.

AEM was down 4.4 per cent at S$9.57 as at 2.50 pm but pared some losses to end the day 2.5 per cent lower at S$9.77.

Systems integrator CSE Global also tumbled on Wednesday, falling as much as 8.2 per cent to S$1.01. The counter closed down 7.3 per cent at S$1.02.

UMS Integration fell 1.5 per cent to S$2.59 and Frencken was down 1.7 per cent at S$2.35.

Singapore chip stocks have also been beneficiaries of the global boom in the artificial intelligence trade, but questions about its sustainability have intensified. Hock Tan, CEO of American chipmaker Broadcom, on Monday compared investor sentiment in AI to gambling and warned of the industry facing a funding crunch.

Still, Dutch semiconductor equipment manufacturer ASML’s results could provide some relief, with its results a possible one-year forward-looking window into chipmakers’ plans. Its advanced tools, which are critical to AI chips, have a lead time that exceeds one year between order and delivery.

The company on Wednesday reported that its net profit more than doubled year on year and raised its annual revenue forecast for the third time this year.

In the US, the PHLX Semiconductor Index fell about 0.2 per cent, down for a fifth straight session. Micron shares retreated 3.6 per cent and Applied Materials fell nearly 7 per cent. Despite the broader decline, shares of major AEM customer Intel were up 1.4 per cent.

Major Asian memory maker SK Hynix saw its shares fall 3.2 per cent on Tuesday in the US, while Samsung Electronics ended flat and Shanghai-listed CXMT was down 2.1 per cent at closing on Wednesday.

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AEM counts one of the world’s three major memory chip companies – Samsung Electronics, Micron and SK Hynix – as a customer. The company runs the systems and equipment that test chips before they are deployed.