By Sherry Qin
It’s been a standout year for Singapore-based chip tester AEM so far.
The company, which tests Intel’s PC chips, is mounting an artificial intelligence-fueled turnaround that echoes that of the U.S. tech giant, its biggest customer.
After years of depressed valuations, AEM shares have risen 460% in 2026 to date, making it the second-best performing stock in Singapore.
Chief Executive Samer Kabbani thinks it’s about time investors woke up to AEM’s potential.
“We see that the market’s finally understanding what we’re doing,” he said in an interview.
High-end chip makers have dominated market focus in the AI era, often leaving other parts of the supply chain unnoticed. As the buildout continues, that’s changing.
Semiconductor testing, the final step before a chip is ready to ship out, used to be a volume-driven, low-profit business. But dramatic increases in both the complexity of chips and the cost of making them have made testing more critical than ever.
Compared to the simpler chips powering consumer electronics, AI semiconductors require much lengthier, complicated testing to ensure a “very accurate, instant and efficient response,” Kabbani said.
Previously, chips had several billion transistors that needed to be tested by being flipped on and off like microscopic switches. Now, AI chips have 100 billion switches, said the CEO.
The highly intricate AI chip manufacturing and packaging process means yields are still not great, “with a lot of failures in the deployment in the server farms,” he added.
As AI accelerators’ price tag reaches over $30,000 per unit, testing has become mandatory insurance to prevent final assembly losses, Macquarie analysts said in a recent note.
One unnoticed defect can scrap an entire assembly of multiple high-value logic and memory chips.
“It’s exciting honestly because of this insatiable demand for testing capability,” the AEM CEO said.
AEM’s first-quarter results underscore the firmness of that demand: Net profit more than quadrupled on year, while revenue climbed 36%.
And that’s just the start of a multi-year upcycle, in Kabbani’s view, one grounded in the industry’s structural change.
AEM raised its full-year revenue guidance by approximately 20%, and Kabbani expects AI-related streams to comprise 75%-80% of the total, up from 60% last year.
The company also stands to gain from years-long efforts to diversify its customer base beyond Intel.
Clients now include a top memory-chip supplier and another AI chip maker analysts have widely understood to be Advanced Micro Devices, though AEM has not made the name public.
AEM has also forged a strategic partnership with Taiwan’s ASE, the world’s largest outsourced semiconductor assembly and testing provider.
A broader customer base of both memory and logic-chip clients provides “fortification” against headwinds, said Kabbani.
Despite the AI-fueled burst in chip demand, semiconductors remain a cyclical business.
If global economic growth slows or data-center demand undergoes a correction–both risks made more acute by the Middle East tensions–advanced chip and forthcoming testing demand could contract.
The company’s meteoric rise has sparked speculation about whether it could be considering a dual-listing in the U.S.
But the CEO sees little urgency to pull that lever, even if it offers deeper liquidity and a better understanding of the AI market.
“I just don’t think [listing on the Nasdaq] is the headline for us for now,” Kabbani said.
“We had to spend time educating the market [on our business],” he said, and investors have finally begun to recognize AEM’s potential.
Article Information
Write to Sherry Qin at sherry.qin@wsj.com
(END) Dow Jones Newswires
May 28, 2026 01:05 ET (05:05 GMT)
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