AEM, UMS, Frencken lead semiconductor stock surge; robust weekly gains ride on domestic, global tailwinds

Semiconductor listcos were trading higher on Friday (Jun 27), notching double-digit gains over the week as a slew of domestic and global developments spelt potential tailwinds for the chip industry.

A buoyant sector outlook, pushback against tariff threats and the opening of a S$123 million facility enabling Singapore to produce the chips were among the developments that could prove favourable for semiconductors.

AEM, UMS and Frencken were among the most heavily traded counters on the Singapore Exchange (SGX).

UMS was up nearly 8 per cent, as AEM climbed nearly 8 per cent and Frencken advanced 5.7 per cent before paring some gains to last rise 2.5 per cent.

Grand Venture Technology was up by 1.6 per cent and Venture rose 1.4 per cent.

On a weekly basis, AEM surged 26.8 per cent from its closing price of S$1.23 on Jun 20. UMS was up 12.4 per cent from S$1.21, while Frencken gained 12.2 per cent from S$1.15.

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This comes a day after the launch of the National Semiconductor Translation and Innovation Centre for Gallium Nitride – a new manufacturing facility that will allow Singapore to produce advanced semiconductors and give local firms in the sector a boost.

The centre’s opening is part of a broader national plan to uplift the semiconductor sector, which currently accounts for nearly 6 per cent of Singapore’s gross domestic product and employs some 35,000 workers.

At the launch, Minister-in-charge of Energy and Science & Technology Tan See Leng highlighted that the domestic semiconductor sector has the potential to be more competitive globally.

Factory output for semiconductors grew 3.4 per cent in the month of May, the second-highest increase among all segments under the linchpin electronics sector, behind the consumer electronics segment, which recorded the largest jump of 42.6 per cent.

Earlier in June, semiconductor maker Frencken announced plans to build a new S$63 million manufacturing facility in Kaki Bukit to scale up its business in Singapore.

On Thursday, semiconductor test solutions provider AEM lifted its revenue guidance for its first half ending June to between S$185 million and S$195 million, from an earlier range of S$155 million to S$170 million, following an unexpected pull-in of orders into FY2025.

Beyond Singapore, semiconductors also look set to see tailwinds.

A Morningstar Equity research report on Friday noted the global semiconductor sector’s upbeat outlook, on the back of booming artificial intelligence demand and recovery from 2024’s cyclical downturn.

These factors could offset any tariff-related headwinds that semiconductors face, the report said, as it pointed to chip orders having rebounded from the “tariff tantrum”.

Moreover, US President Donald Trump’s threats to place tariffs on imported semiconductors have drawn far-reaching blowbacks from across the globe.

Stakeholders protested the potential move, which threatens to snarl supply lines and raise costs for consumers, given the ubiquity of the chips which are now found in nearly everything – from microwaves to smartphones.