- 1H25 revenue/PATMI were within our expectations, at 49%/48% of our FY25e forecasts. 1H25 revenue/PATMI increase of 20%/9% y-o-y was driven by strength in the semiconductor segment, due to stable sales growth to a key European customer and a rebound in Asia sales.
- Frencken’s outlook for its semiconductor segment is more muted due to potential order volatility from its customers. Nonetheless, we remain optimistic about the demand for advanced chip equipment components over the next two years, driven by Hyperscalers’ strong demand for AI chips and rising sovereign AI investments.
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The Positives
Strong demand from Semiconductor segment.
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- Management guided semiconductor revenue to remain stable h-o-h in 2H25e, representing a y-o-y increase of about 4%. The muted growth outlook is due to potential order volatility from its customers.
- A key USA-based semiconductor equipment customer expects revenue and earnings to be down q-o-q in 3Q25e due to nonlinear demand from leading-edge customers. However, we are still optimistic about the demand for advanced chip equipment over the next two years, as hyperscalers are more optimistic in their CAPEX guidance for AI infrastructure including AI chips, and sovereign demand is rising as well.
Strength in Medical and Industrial Automation segments.
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