AEM’s 9-month profit sinks 96.9% to $3.5 million amid chip slump
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AEM attributed the drop in revenue to “overall sluggishness” in the semiconductor industry.
PHOTO: REUTERS
Paige Lim
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SINGAPORE - Semiconductor equipment maker AEM Holdings has posted a 96.9 per cent dive in net profit to $3.5 million for the first nine months of 2023, from $115.3 million for the same period a year ago.
Revenue for the nine months fell 48.2 per cent to $387 million, from $746.6 million for the year-ago period.
In a business update on Thursday, AEM attributed the drop in revenue to “overall sluggishness” in the semiconductor industry, saying that most of its customers were pushing their capital expenditures related to testing to 2024 as a result of lower demand across the industry.
The group pointed out that during the third quarter, semiconductor device makers continued to reduce their inventories due to a weak macroeconomic environment.
As consumers shift their spending towards services, consumer purchases of electronic devices worldwide have, in turn, taken a hit in the aftermath of the Covid-19 pandemic boom, the group said.
“This has driven tester utilisation rates down, resulting in device manufacturers delaying the release of new devices, and similarly delaying the acquisition of new test platforms.”
AEM’s profit before tax fell 92.8 per cent to $10.1 million for the nine-month period, from $141.4 million a year earlier. This was because it bore the full impact of a US$20 million (S$26.7 million) settlement arising from a legal dispute in the third quarter, it said. The dispute involved two US companies, Advantest America and Advantest Test Solutions.
Noting the challenging test equipment market in 2023, AEM chief executive Chandran Nair said: “Despite the difficulties, we have navigated the landscape with agility and thus achieved profitability through cost optimisation and operational efficiency.”
He also said AEM will continue investing in its technology pillars, noting that such investments have already resulted in a growing patent portfolio.
“(This will) provide us with the technology differentiation that is highly sought after by our customers, and we firmly believe that we are well positioned to take advantage of the market upswing expected in late 2024 and beyond,” Mr Nair added.
Shares of AEM fell 4.6 per cent to close at $3.34 on Friday. The opening price was $3.36. THE BUSINESS TIMES
