Chip stocks: UMS pares morning gains despite Q2 profit surge, AEM reverses into drop

[SINGAPORE] Shares of UMS Integration on Friday (Aug 14) were up 8.2 per cent after it reported an 89 per cent surge in second-quarter net profit.

On Thursday, UMS posted a S$19.4 million net profit for the period, up from about S$10.3 million in the year-ago period. This came as revenue for the three months ended June rose 29 per cent to S$87.1 million.

UMS CEO Andy Luong cited the “strong artificial intelligence ‘super-cycle’ and sustained aviation boom worldwide” for the much-improved numbers.

The counter on Friday rose to as high as S$2.92 within four minutes of market open, but pared all of its gains by noon to be flat at S$2.70. It later ended 0.7 per cent up at S$2.72.

AEM, Frencken decline

Bellwether chip stock AEM meanwhile fell on Friday, after having risen 14 per cent the day before on a 10-times higher net profit of S$31 million for the half year ended Jun 30. The counter initially rose as much as 5.1 per cent on Friday, but was down 4.4 per cent at S$10.50 by noon. It closed 4.7 per cent down at S$10.46.

Fortunes were also not rosy for Frencken , which manufactures high-precision components, modules and complete sub-systems for multinational companies.

Its shares fell as much as 7.2 per cent, or S$0.20, to S$2.59 in the first minute of trading, after it reported a 3.4 per cent drop in first-half net profit on Thursday. The counter ended Friday 5.7 per cent or S$0.16 lower at S$2.63.

Among its customers are health technology company Philips and chipmaking equipment maker ASML.

Frencken’s administrative and general expenses widened 9.9 per cent year on year to S$32.6 million, while revenue dropped 0.8 per cent to S$427.8 million.

SEE ALSO

UMS Integration Q2 profit up 89% buoyed by AI ‘super cycle’, aviation boom

AEM, UMS lead chip and tech surge in Singapore as AI trade confidence returns

AI-driven macroeconomic upgrade

The chip stocks’ Q2 earnings come amid a positive macroeconomic backdrop in Singapore.

The government on Tuesday upgraded its 2026 economic growth forecast for Singapore to a range of 4.5 to 5.5 per cent. This was up from the previous forecast of 2 to 4 per cent as an accelerating global boom in AI investment lifted the Republic’s prospects for the rest of the year.

On a quarter-on-quarter seasonally adjusted basis, the economy grew 1.4 per cent in Q2, underpinned by the manufacturing, wholesale trade, and finance and insurance sectors.

The government added that manufacturing output surged 12.5 per cent year on year, thanks to the electronics and precision engineering clusters, as global demand for AI-related semiconductors, including networking and memory chips, boosted production lines in Singapore.