Singapore Chip Tester AEM Sees Profit Surge on AI Equipment Orders

KEY TAKEAWAYS

·Singapore test-equipment maker AEM reported first-half net profit of S$30.8 million, ten times the S$3.1 million recorded a year earlier, with revenue climbing 30 percent to S$247.2 million.
·A fabless AI and high-performance computing customer became the largest revenue contributor as production ramped, driving 52.5 percent growth in the test-cell solutions segment to S$180.9 million.
·AEM raised its full-year 2026 revenue guidance to S$630 million to S$680 million and said its AMPS platform backlog exceeded S$400 million as of mid-August.

Equipment Demand Accelerates

Singapore-listed AEM recorded net profit of S$30.8 million in the six months through June, a tenfold increase from S$3.1 million in the same period of 2025, according to the company. Revenue climbed 30 percent to S$247.2 million, up from S$190.3 million a year earlier.

The semiconductor test-equipment specialist attributed the performance to accelerating orders from a fabless customer focused on AI and high-performance computing chips. That client became the largest revenue source during the half, as production volumes expanded.

This marks the fourth straight quarter of rising net profit and the third consecutive quarter of revenue gains for AEM. Earnings per share reached S$0.0979, compared with S$0.0098 in the first half of 2025. The board approved an interim dividend of S$0.024 per share, payable September 8; no dividend was issued in the prior-year period.

Test-Cell Business Leads Growth

AEM's test-cell solutions division generated S$180.9 million in revenue, up 52.5 percent and accounting for 73.2 percent of total sales. Demand centered on highly parallel test platforms equipped with advanced thermal-control technology, capabilities increasingly critical as AI accelerators and chiplet designs grow more power-dense and difficult to validate.

The contract manufacturing arm pivoted to support internal production scale-up of the AMPS test-equipment platform, leading to a more-than-fourfold increase in inter-segment revenue. External contract manufacturing sales slipped 5.7 percent to S$63.2 million, reflecting weaker orders from oil and gas clients. The instrumentation segment posted S$3.1 million, down from S$4.6 million.

AEM highlighted growth in device-specific configurables and collaterals, which hit S$72.3 million in the second quarter, up 12.6 percent from the first quarter. The company describes this as a "razor-razorblade" revenue model: initial equipment sales generate recurring income as customers refresh test configurations for new device generations. Management expects this stream to strengthen margin stability as product ramps mature.

Raised Guidance and Growing Backlog

The company lifted its full-year 2026 revenue guidance to a range of S$630 million to S$680 million, up from the earlier S$550 million to S$600 million forecast. The revision reflects continued ramp-up by the fabless AI and HPC customer, adoption of the AMPS platform by a personal computer and foundry client for future requirements, and the scheduled shipment of AEM's first memory final test handler in the fourth quarter, ahead of a production increase in 2027.

Full-year earnings per share are now projected between S$0.245 and S$0.275. The AMPS platform backlog stood above S$400 million as of August 12, driven by orders from the AI and HPC fabless customer and the PC and foundry client.

Industry forecasts cited by AEM project global test equipment sales rising to US$15.3 billion in 2026 and reaching US$20.8 billion by 2028, with test equipment representing roughly 9 percent of total semiconductor capital expenditure over that span. Rising test intensity in AI accelerators, stacked memory and heterogeneous chiplet architectures is fueling the expansion.

Strategic Priorities

Chief executive Samer Kabbani said sequential growth in both revenue and pre-tax profit reflects the strength of AEM's offerings as AI and HPC reshape test economics. As devices become more complex and power-dense, customers are turning to precise thermal management, highly parallel testing and full-stack integration, areas where AEM holds competitive differentiation.

The company is advancing growth across five verticals: personal computers and foundries, AI and high-performance computing, memory, outsourced semiconductor assembly and test providers, and contract manufacturing. Meaningful contributions from the first two segments, combined with the long-term partnership with Advanced Semiconductor Engineering, position the firm to sustain momentum through the rest of 2026 and into 2027.

AEM shares rose 0.9 percent to S$9.63 on August 12, before the results were disclosed.

Asia's overnight moves, distilled into a five-minute read.

Equipment Demand Accelerates

Test-Cell Business Leads Growth

Raised Guidance and Growing Backlog

Strategic Priorities

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