AEM share price in scary chapter
It’s the 3rd quarter financial reporting season again as we enter the last quarter of 2025. I thought its timely to write an article on AEM share price given that the last update was way back in March 2025. Back then, under the former CEO Amy Leong, the narrative for AEM was all about business recovery and customer diversification. Since then, the narrative for AEM has turned sinister.
First of all, AEM stunned the market when it announced the resignation of former CEO Amy Leong on 27 July 2025. The news was indeed a bombshell for many investors as Amy Leong led AEM for just one year and many investors expected her tenure to last longer given her solid C-suite track record in FormFactor, a major supplier of Intel. Was she forced to resign? In the SGX filing, the reason for her departure was “board-led leadership realignment for growth”, instead of the usual reason such as “pursuing other interest”.
The abrupt resignation of Amy Leong knocked down AEM share price, which plunged from $1.70 in July to $1.40 in August. The halt in the decline of AEM share price was largely due to the release of 1HFY2025 financial result, which saw net profit jumped 284% year-on-year to $3.1 million. Revenue increased 9.6% year-on-year to $190 million. The Group also provided revenue guidance for 2HFY2025 of $170 million to $190 million, broadly in line with 1H2025.
Whilst the 1HFY2025 did manage to break the fall of AEM share price, the counter was still in sluggish form in August period, largely because discerning investors would have noted that AEM actually incurred a loss of $700,000 in the second quarter (the net profit for 1st quarter was $3.8 million). The loss should be attributed to the foreign exchange loss of $5.89 million.
The market was also lukewarm to the appointment of the President and CTO, Samer Kabbani, as the new CEO. In my view, although Mr Kabbani has solid technical leadership, I am not sure if he could excel in his role as CEO, which requires very different strategic skillsets.
Just when investors begun to write off this counter, AEM share price got an unexpected boost from Intel when the US chipmaker announced Nvidia’s shock decision to invest US$5 billion in Intel shares. Intel also revealed that the US government would also invest US$8.9 billion in Intel shares. The twin deals helped to push Intel shares to a 1-year high of US$37, lifting AEM share price in the process as well.
Riding on the recovery of Intel’ shares, AEM share price hit a high of $2.05 on 3 October 2025. The turnaround of AEM share price caught many investors by surprise due to the depressed form for such a long period of time. However, the counter began to correct to $1.70 due to market’s fear of AI bubble. The fear came on the back of several multi-billion dollar deals on AI, such as that of OpenAI deal with Samsung and SK Hynix, pushing valuations of several tech stocks to sky-high levels.
With the bullish sentiments on AI and a new CEO at the helm, how will AEM fare in 2026? In this article, I will share some insights on the outlook for AEM share price in 2026.
In this blog, I have always maintained that on its day, AEM share price can be unbeatable. Conversely, when the tide goes against AEM share price, the counter can spiral out of control. On this note, this counter is really not for the faint-hearted. Note that this is an opinion article and not meant to be a financial advice. Please do your due diligence or engage financial advisors before investing in the stock market. I am vested in this counter, so my views on AEM share price may be biased.
Dark clouds loom for AEM share price
On the surface, AEM share price should be riding on the AI boom and Intel’s recovery. However, the company has a knack of shooting itself in the foot. Just when investors thought that its light at the end of the tunnel for AEM share price, investors must be stunned to receive news of yet another lawsuit from AEM’s competitor, Advantest, who is suing AEM over alleged infringement of 2 patents relating to wafer-level test systems.
AEM claims that the patents relate to a specific wafer level test system that is not practiced by the company and that it strongly denies the allegations in Advantest’s complaint. AEM has already retained U.S. counsel to defend itself against Advantest’s claims, which lack merit.
It all seems like déjà vu to me as the Advantest has previously sued AEM over patent infringement in 2021. In that saga, AEM has paid Advantest US$20 million in two instalments. Additionally, that was a long drawn-out legal battle, causing AEM to incur massive legal fees. According to DBS research, AEM incurred $11.1 million/$27.0 million/$9.0 million in FY21/22/23 vs $5.1 million in FY20 and $9.2 million in FY24. Both the legal fees and arbitration settlement have weighed on AEM’s financial performance in recent years, plunging the company into turmoil.
The company also maintained that “the filing of Advantest’s latest complaint does not affect AEM’s business operations, its existing commercial offerings or products, or its ongoing ability to serve its customers. The Company maintains its revenue guidance for 2H 2025 as previously announced on 13 Aug 2025”. Notwithstanding the stance made by AEM, I do think that its too premature to claim that the latest lawsuit will not have material impact on the reputation of AEM given that it is still a relatively unknown player in the global stage. For this reason, I do think that investors should thread with caution.
Creative Technology’s 2006 battle with Apple provided a sobering lesson for both Temasek and AEM. That saga highlighted that the way to win the technology war is to protect intellectual property through filing of patents. Incidentally, Stats Chippac obtained its first US patent for its chip testing equipment in 2016, after Temasek sold the company. Over at Temasek, the sovereign wealth fund had backed Grab Holdings which had 12 granted patents and 255 pending patent applications as of 31 May 2021. Temasek had also nurtured another SGX-listed company, Nanofilm Technology which holds around 48 patents.
In August 2021, AEM placed out 26.8 million shares to Temasek for a cash consideration of $103.1 million. The initiating factor for Temasek to invest in AEM should be the company’s proprietary capability in back-end chip testing. If you scan the landscape in Singapore, you would realize that there are very few listed home-grown semiconductor companies which possess patents. AEM belongs to this unique group. Its peers, Frencken and UMS do not hold any patents.
The patents used in AEM’s thermal control of its System Level Test equipment allows high powered chip to be tested under thermal controlled environment without damaging the chip. My hypothesis is that Temasek Holdings might have anticipated the grant of these patents to AEM and this could have prompted the sovereign wealth fund to invest in the company.
Financial performance
On the basis of the financial data, it appears to me that AEM still has not wean off its reliance on Intel, so diversifying revenue stream remains the top of AEM’s strategic priority.
The latest result basically reflected the strategy of customer diversification is on track but Intel continued to cast a shadow over AEM’s financial performance. For example, the Group recorded revenue of $190.3 million for 1H2025, driven by the pull-in of orders related to its non-cancellable, long-dated purchase order program with one of the Group’s customers – presumably its Intel.
Notwithstanding the headwinds, I noted that the financial strength of AEM has actually improved in 1HFY2025. The Group generated operating cash flows of S$46.4 million during 1HFY2025, increasing cash balances by 36.6% from 31 December 2024 while reducing financial liabilities by 22.7%. Additionally, inventories dropped from $296 million in December 2024 to $245 million in June 2024. The reduction in inventories may be an indication that AEM is ramping up production for its Test Cell Solutions (TCS) business unit.
The TCS unit continues to be AEM’s key business unit as it generated $118.6 million worth of revenue and $5 million profit in the first half of the year. Had it not been the $6 million foreign exchange loss, the financial performance for 1HFY2025 would have been good. Balance sheet is still healthy, with current assets amounting to $448 million while current liabilities amounted to $122 million.
The Group expects revenue in 2HFY2025 to be in the range of $170 million to $190 million, with its major AI / HPC customer expecting to ramp production in late 2025 / early 2026 for its next generation AI accelerator
Conclusion
It is not a secret that AEM has been struggling to turn around the corner for the past few years. Despite the challenges, Temasek Holdings has not trimmed its stake in AEM. This is unlike the rest of the substantial shareholders like Malaysia’s EPF and Aberdeen, which had pared down their stakes in AEM in the past few years in order to reduce their risk exposures. The steadfast conviction of Temasek Holdings in AEM might be puzzling for many investors. Yet, in my perspective, I believe that conviction could be driven by Singapore’s government.
If you look back over the decades, Singapore has not produced many innovative products at the global market stage, probably due to the very small talent pool. Against this backdrop, AEM Holdings must have attracted the attention of the Singapore government with its various technology patents to support the System Level Test 2.0 solutions for the semiconductor industry
Those who had sold off their stakes in AEM were either disillusioned with the business performances of the company or have moved on to other counters which may provide better returns. I would be lying if I said that the thought of exiting this counter has not crossed my mind but cutting losses is not an option for me as the losses that would be incurred would be substantial.
That said, is this really the end of the road for AEM? Honestly, I really don’t know given the long-term uncertainty pertaining to the lawsuit with Advantest. The long-term potential is there but existing investors need to have strong holding power to withstand this winter. Till then, enjoy the ride.
