AEM shares rise 5.4% after Intel announces plan to build US$20b chip plants
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Ong Sing Yee
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SINGAPORE (THE BUSINESS TIMES) - Shares of AEM Holdings hit an intraday high of $4.13 at 2pm on Wednesday (March 24) amid active trading, up 5.4 per cent.
As at 2.04pm, AEM's units were trading at $4.12, up $0.20 or 5.1 per cent, with 10.4 million shares worth $41.7 million changing hands.
No married deals were recorded, according to ShareInvestor data.
The price movement came after US chip giant Intel's Wednesday announcement that it would spend U$20 billion (S$26.9 billion) on two new plants in Arizona and create a foundry business that will make chips for other companies. Intel's chief executive officer Pat Gelsinger has also pledged that majority of the company's chips will be manufactured in-house.
In a report on Wednesday by Lim & Tan Securities, the firm said that AEM is a crucial partner of Intel, supplying it next generation test handlers. It added that the latest Intel news was "bullish" for the electronic services provider, which is Intel's key test handler supplier listed in Singapore.
AEM currently trades at 10 times its price to earnings ratio, and yields 2 per cent, the stockbroking firm said.
Lim & Tan Securities called Intel's plan an "aggressive move that puts Intel into direct competition with Taiwan Semiconductor Manufacturing Co, the world's most advanced chipmaker".
