AI chip demand lifts Singapore tech stock valuations

SMID caps and semiconductor equipment players lead the charge as global tech giants ramp up capital expenditure.

Singapore’s technology sector has enjoyed a strong valuation lift and a wave of institutional backing this year, fuelled by a global surge in artificial intelligence infrastructure (AI).

“For 2026 year-to-date, stocks within the local Technology sector that focus on semiconductor equipment and testing, or AI-driven hardware have mostly seen valuation expansions and net institutional inflows,” Singapore Exchange (SGX) said in its latest market update.

This comes as Enterprise Singapore reported a 94.8% surge in electronic non-oil domestic exports for May. The growth was driven by robust AI-related demand, particularly for integrated circuits, disk media products, and PCs.

SGX noted that the “AI boom has seen massive capital expenditure amongst tech giants with strong demand for chips globally, and Singapore’s listed technology manufacturers have also been a beneficiary.”

Earlier, SGX said that institutions poured $582.5m into Singapore technology stocks in 2026 through 3 June as the AI chip cycle fuelled a re-rating in semiconductor-linked counters

Net institutional inflows and valuation expansion within the sector have been concentrated in semiconductor test, equipment, and production-support companies.

SGX said that small and mid-caps with over $1m in average daily turnover have attracted more than $680m in net institutional inflows year-to-date. This includes iEdge Singapore Next50 Index constituents UMS Integration, AEM Holdings, and Frencken Group.

“Singapore-listed exposure to AI hardware is largely concentrated in precision components, systems integration, and semiconductor equipment manufacturing,” SGX said.

For instance, SGX said that UMS Integration benefitted from “unprecedented AI-driven chip demand globally”, supporting orders for deposition, etch and advanced packaging tools across memory and foundry chipmakers.

The company said in its first quarter (Q1) 2026 update that it recorded a net profit of $14m, up 43% from last year, amidst 21% revenue growth for its semiconductor business.

AEM Holdings also recorded a strong Q1, with revenue rising 35.8% to $116.9m, with growth driven by a continued high-volume production ramp from its fabless AI/ High-Performance Computing (HPC) customer and improving order activity from its PC/ Foundry customer.

“Meanwhile, Frencken Group’s Mechatronics Asia segment recorded continued revenue growth in Q1 2026, driven by sustained demand from key front- and back-end semiconductor equipment customers,” SGX said.

“Beyond the Next50 constituents, other actively traded counters that have also benefitted from the AI cycle include Micro-Mechanics and InnoTek,” the group said.

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