AEM reported 1Q26 earnings of S$14m (+329% y-o-y), significantly above our estimates, meeting 44% of our full-year forecasts, due to higher-than-expected revenue and net margin from better operating leverage.
1Q26 earnings above expectations.
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Growth was driven by the successful deployment and customer acceptance of the group’s highly parallel package test solutions, featuring the group’s proprietary PiXLTM thermal technology that delivers superior test coverage and high-throughput performance for power-dense AI devices.
On the other hand, the contract manufacturing segment fell 16% y-o-y due to softer demand from oil and gas sector customers.
AI/HPC customer on track to become its largest customer
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Concurrently, AEM’s PC/Foundry customer is seeing a healthy recovery in demand, with order momentum improving in 2026.
Globally, the semiconductor market is projected to exceed US$1.6t by 2030, with AI/HPC forming the foundation of industry demand. This structural shift, analogous to the PC, internet, and mobile waves, is underpinned by approximately US$7t of data centre infrastructure investment needed by 2030, driving significantly higher device volumes, longer test times, and growing test complexity.
Gaining traction through its five-pillar growth strategy
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Above is an excerpt from a report by UOB Kay Hian Research. Clients of UOB Kay Hian may be the first to access the full PDF report @ https://www.utrade.com.sg/.
