AEM and other Singapore chip stocks tumble after Wall Street hits a tech rout
This follows an overnight Wall Street sell-off after Intel’s sales forecast missed analyst estimates.
Singapore's chip stocks experienced a significant decline on the stock exchange, mirroring the sell-off observed on Wall Street. Leading semiconductor solutions firm AEM witnessed its stock plummet by up to 11% early on October 30, cooling to a 7% drop by the noon trading break. Newly-listed Mi Material, specializing in chip packaging materials, saw a decline of over 14%, while UMS Integration, a semiconductor equipment manufacturer, suffered a near 6% loss.
PC Partner, a global electronics and hardware manufacturer listed on the Singapore Exchange (SGX), also saw a dip exceeding 4%.
The decline was ignited by a market-wide sell-off, triggered by Intel's disappointing sales forecast, which had fallen short of analyst estimates. Intel's shares plummeted 23% the following day after the company warned of potential cash burn in 2026 due to a shrinking personal computer market, manufacturing bottlenecks, and heavy investments in production expansion. The chipmaker also grappled with supply disruptions, hindering its ability to fully capitalize on the burgeoning demand for data-center chips.
Intel's CEO, Tan Lip-Bu, disclosed during a conference call that the company was facing immediate challenges, including manufacturing supply shortages, a memory crunch, and a decline in personal computer demand. AEM, which had an established strategic partnership with Intel, was directly affected by the semiconductor giant's struggles.
The tech downturn also impacted Google's Alphabet, which saw its shares plummet by over 12% on October 29, wiping out approximately US$500 billion in market value – marking what was described as its "worst day ever." This downturn followed the tech giant's third quarter earnings, which fell short of analysts' profit expectations.
The ripple effects of the tech sell-off were evident in Asia, with South Korea's Kospi index experiencing a 5% decline during morning trading on October 30. The index houses prominent global chip firms such as SK Hynix and Samsung Electronics.
Analysts highlighted that while AI demand continues to surge, investors are growing increasingly skeptical due to concerns over the escalating costs of meeting this demand and translating growth into profits and cash flow. Cloud providers are experiencing rapid growth, semiconductor and memory companies are enjoying robust demand, and AI is beginning to generate revenues for software businesses.
However, the rising cost of supplying AI demand is outpacing the profits it generates, making investors more selective. The distinction between companies capable of financing investments through recurring cash flow and those reliant on external capital is becoming increasingly crucial for investors.
Written by urgent.news from Straits Times Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
