Singapore semiconductors’ slide continues as global chip-stock rout deepens
Shares of AEM Holdings, CSE Global, UMS Integration and Frencken each fall more than 6%
[SINGAPORE] Semiconductor stocks in Singapore continued a sell-off for a third straight day as a global chip rout deepened despite positive results for Dutch giant ASML.
AEM Holdings shares shed 9.9 per cent on Thursday (Oct 15) to close at S$8.80. UMS Integration , which was trading ex-dividend at a S$0.01 quarterly dividend, dropped 10 per cent to S$2.33.
The pain extended to CSE Global as well, which retreated 10.8 per cent to S$0.91 as at 3 pm. It later pared some losses to end the day 9.8 per cent lower at S$0.92.
Frencken shares also took a beating and dropped 6.4 per cent to S$2.20.
The closely watched Philadelphia Semiconductor Index fell 4.3 per cent on Wednesday, and stood 12 per cent down over the past six sessions, its longest losing streak in 17 months.
The gauge of semiconductor stocks had lost US$1.6 trillion in market value as at Wednesday, with more than half the stocks down at least 10 per cent across the six days.
“We view this latest bout as more of a recalibration of expectations than a fundamental break in the artificial intelligence investment story,” said Ulrike Hoffmann-Burchardi, global head of equities at UBS Global Wealth Management, in a Wednesday note.
Global effects
AEM customer Intel was down 13 per cent over the past six sessions, while Asian chip giants also suffered losses.
South Korean memory maker SK Hynix dropped more than 6.1 per cent on the Nasdaq, while Chinese peer CXMT fell more than 5.2 per cent at trading close on Thursday.
Singapore’s chip stocks sell-off came as the Singapore Exchange (SGX) announced plans to introduce five new artificial intelligence-linked Singapore Depository Receipts (SDRs).
These include SK Hynix, as well as Taiwan’s TSMC – which builds the physical processors for nearly every major AI innovator – and Chinese frontier AI lab Z.Ai. Their SDRs will allow investors access to these stocks in smaller denominations via one marketplace.
Still, European shares on Wednesday inched up after strong third-quarter earnings from ASML reassured European investors concerned about AI demand.
The Dutch chipmaker’s shares were up 1.2 per cent after it said customers were already looking to place orders for its advanced chipmaking tools for 2029 and 2030.
The company on Wednesday reported that its net profit had more than doubled year on year, and raised its annual revenue forecast for the third time in 2026.
Chip swings to continue
Wild swings in global chip stocks are likely to continue until markets know where US interest rates are heading and who controls the US Congress after the midterms, said Nigel Green, chief executive of financial advisory deVere Group, on Thursday.
“Chips are feeling it most because they rallied hardest and they’re the most exposed to borrowing costs,” he said. “When sentiment shifts, they move furthest in both directions.”
Hock Tan, CEO of American chipmaker Broadcom, on Monday also compared investor sentiment in AI to gambling and warned of the industry facing a funding crunch.
Such AI funding fears deepened when the bonds of a heavily indebted AI cloud provider slid towards distressed levels, said deVere.
Wednesday’s US inflation figures showed consumer prices rising at their fastest monthly pace in five months, and lifted bets on further Federal Reserve hikes.
“Higher rates hit chip stocks twice,” Green said. “They make future profits worth less today, and they make it more expensive to borrow the vast sums needed to build AI infrastructure.”
Still, while such swings may make investors “uncomfortable”, they help pull valuations back towards “levels grounded in earnings and cash flow”, he added.
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