<div id="readability-page-1"><div>[SINGAPORE] Itâs been a disparate picture for semiconductor stocks in the region in the past few months and beyond, including Singapore, as investors mull over a variety of factors, including new chip tariffs, the memory chip shortage and the artificial intelligence (AI) boom.Some semiconductor stocks have slumped this past week and investors shorted some stocks after US President Donald Trump imposed tariffs aimed at AI chips. Yet, other names rose on a mix of drivers.Trump has imposed a 25 per cent tariff on specific high-performance artificial intelligence chips, including the Nvidia H200 and AMD MI325X, following a nine-month investigation under Section 232 of the Trade Expansion Act. The move targets high-end semiconductors and the devices containing them as part of a strategic effort to reduce American reliance on foreign supply chains and incentivise the manufacturing of these critical components within the United States.Shares of AEM initially declined but pared their losses since Trumpâs announcement a week ago on Jan 14, rising 1.1 per cent at close on Wednesday (Jan 21), while Frencken and UMS were down about 3.1 per cent and 2.2 per cent, respectively, and Venture was marginally down.Outside of Singapore, Nvidia pared its losses in the past week since the tariffs were announced, climbing about 0.1 per cent while AMD was up 11.9 per cent after a new board appointment, despite being targeted in the latest levy. Intel was up 11.4 per cent across the same period on bets on foundry growth, while ASML rose 6.5 per cent on a strong outlook from key customer TSMC.In Malaysia, Inari Amertron was down 5.2 per cent after major customer Broadcom did not follow a broader US recovery after being hit by a Chinese regulatory directive toÂ stop using foreign software solutions. Broadcom shares were down about 3 per cent since close on Jan 14. Shares of Coraza were slightly down.Meanwhile, Delta Electronics in Thailand, a key data centre component supplier, was up 13.4 per cent in the past week as HBM and data centre demand stayed high.The divergence indicated how investors â in the very diverse semiconductor supply chain â could be prioritising specific customer exposure over general tariff fears. Some are holding faith in the so-called âTACOâ trade â an acronym for âTrump Always Chickens Outâ â betting that the threats will de-escalate. However, that belief was tested earlier in the week following a broad sell-off on Tuesday.AEM tracked the recovery of its key client Intel, which soared 11.4 per cent in the past week on strong expected demand for data centre chips. Meanwhile, Innotek â which in October clinched a deal to supply equipment to support Nvidiaâs AI efforts â saw its shares spike over the past week, climbing 19 per cent to S$0.74 as at market close on Jan 21.Despite the steep levy, these latest semiconductor tariffs will have a âminimal impactâ on Singapore, said the Republicâs Ministry of Trade and Industry on Tuesday. The tariffs only apply to a ânarrow category of semiconductors not currently manufactured in Singaporeâ, said the ministry, which arrived at its preliminary assessment after consultation with the local semiconductor industry.Still, thereâs a potential overhang in the future that investors will be watching. In the same announcement, the White House said that in the ânear futureâ, Trump may impose broader tariffs on imports of semiconductors and âtheir derivative productsâ.<h2>Analysts positive even as investors go short</h2>Sentiment remains cautious. Together with the decline in certain stocks, both UMS and AEM were two of the five most shorted Singapore stocks as at Jan 16, S&amp;P Global Market Intelligence said.But analysts are positive. Macquarie Equity Research on Monday initiated coverage on Frencken with an âoutperformâ rating and target price of S$1.76. The equities platform said it expects a second-half 2026 pickup in semiconductor orders for Frencken.Frencken customer ASML, which holds a near-monopoly on the advanced lithography machines used to produce high-end AI chips, could see shipments of those machines rise from 47 to 54 units, with shipments to be backloaded, said its analysts.âWe expect this to translate to more orders for Frencken, as ASML demands more parts to fulfil its order backlog,â they added.Ahead of the latest tariffs, DBS on Jan 9 reiterated a constructive stance on Singapore technology, citing an extended semiconductor upcycle and state-led market reforms. The bank favoured Frencken, with a target price of S$1.92, for its diversified semiconductor exposure, alongside UMS, with a target price of S$1.85, which it said should capitalise on AI-driven production ramps and double-digit industry growth. Global chip stocks also soared on Thursday after Nvidia chief executive officer Jensen Huang at Davos said that the global AI buildout will require trillions of dollars of investment â reinforcing investor enthusiasm.<h2>The memory effect</h2>Beyond the limited direct impact of tariffs, Singaporeâs manufacturing sector is expected to benefit from the sustained global shortage of dynamic random-access memory (DRAM) chips. The scarcity is expected to last for at least another year, having been spurred by Micronâs exit from the consumer DRAM market. Both UMS and Frencken are beneficiaries of the global shortage, DBS said.Micron produces 98 per cent of its top-end flash memory chips in Singapore and plans to start operations at its upcoming high-bandwidth memory (HBM) manufacturing plant in Singapore later this year. HBM is used for high-performance tasks such as training AI models.Reflecting this demand, shares of US-listed Micron are up about 66 per cent since the companyâs announcement on Dec 3 and continued the rally in 2026, climbing about 16 per cent since the latest tariffs were announced as HBM demand continues to rise.Analysts contend that the accretion of value in upstream semiconductor manufacturing will likely eclipse broader downstream cost pressures, presenting a potential strategic upside for major production hubs like Singapore.</div></div>

SOXX

SOXL

Semiconductor stocks in Southeast Asia have shown mixed performance due to factors like new chip tariffs and the AI boom. US President Trump imposed a 25% tariff on specific AI chips, impacting stocks differently. While some stocks like AEM and Nvidia saw slight recoveries, others like Inari Amertron faced declines. Analysts remain optimistic, with Macquarie initiating coverage on Frencken with an outperform rating, anticipating a rise in semiconductor orders. Despite the tariffs, Singapore's Ministry of Trade and Industry stated the impact would be minimal, although broader tariffs may be considered in the future.

Businesstimes News

iShares Semiconductor ETF

SPDR S&P Semicon

Invesco Semiconductors ETF

VanEck Semiconductor ETF

Direxion Semicon Bull 3X

Frencken

NVIDIA

Tariff risks vs AI boom: S-E Asiaâs semiconductor stocks diverge but upsideâs ahead

Tariff risks vs AI boom: S-E Asiaâs semiconductor stocks diverge but upsideâs ahead

Tariff risks vs AI boom: S-E Asiaâs semiconductor stocks diverge but upsideâs ahead