Chip stocks: UMS pares morning gains despite Q2 profit surge, AEM reverses into drop
[SINGAPORE] Shares of UMS Integration rose as much as 8.2 per cent in early trade on Friday (Aug 14) after the group reported an 89 per cent surge in second-quarter net profit.
On Thursday, UMS posted a S$19.4 million net profit for Q2, up from about S$10.3 million a year earlier. This came as revenue for the three months ended Jun 30 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 improved numbers.
On Friday, the counter reached as high as S$2.92 within four minutes of market open, though it pared all of these gains by noon. It ended the day 0.7 per cent up at S$2.72.
AEM, Frencken decline
Bellwether chip stock AEM , meanwhile, fell on Friday after a 14 per cent jump 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 in the morning, but was later down 4.4 per cent at S$10.50 at the midday trading break. 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.
Among its customers are health technology company Philips and chipmaking equipment maker ASML.
Frencken’s shares fell as much as 7.2 per cent or S$0.20 to S$2.59 in the first minute of trading on Friday, a day after it reported a 3.4 per cent drop in H1 net profit. The counter ended Friday 5.7 per cent or S$0.16 lower at S$2.63.
The group’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.
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 a 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.
