Excerpts from CGS-CIMB report
Analysts: William Tng, CFA & Izabella Tan
AEM Holdings Ltd
Embracing Test 2.0
|■ AEM was a presenter at the second run of our CGS-CIMB Tech/EV Conference on 29 Mar 2023.
■ Reiterate Add with an unchanged TP of S$3.86.
|Key highlights from our conference
Testing new chips
“AEM believes its Test 2.0 solutions address customers’ testing requirements (in terms of lowering cost of test and providing a more complete test coverage) as the new generation of semiconductor chips grow in complexity and packaging technologies for such chips evolve.”
We highlight the key discussion points from AEM’s presentation at our second CGS-CIMB Tech/EV Conference on 29 Mar 2023.
AEM believes its Test 2.0 solutions address customers’ testing requirements (in terms of lowering cost of test and providing a more complete test coverage) as the new generation of semiconductor chips grow in complexity and packaging technologies for such chips evolve.
AEM believes its ability and willingness to customise solutions suited to customers’ needs, rather than providing a big-ticket single solution to customers, is a key competitive differentiating factor for the company.
The company believes its new customers could account for 10-20% of FY23F revenue, with further growth expected in FY24F and beyond. AEM has also strengthened its component offerings.
On 12 Aug 2022, the company announced that it had acquired a 53.3% stake in Nestek Korea Co Ltd (unlisted), which develops and manufactures probe pins and test sockets for various electronic components used in semiconductor chip testing.
|Updates from its key customer
Separately, AEM’s key customer also hosted its Data Center and AI (Artificial Intelligence) Investor Webinar on 29 Mar 2023.
Intel (INTC US, NR, CP:US$31.52) updated that its fourth-generation Xeon processor for data centres, code-named "Sapphire Rapids," was finally being shipped to over 50 original equipment manufacturers after receiving 450 design wins following a one-year delay.
Intel also provided an update on the roadmap for the introduction of future generations of data centre chips, with its fifth-generation Emerald Rapids processor scheduled to ship in 4Q23F followed by Sierra Forest and Granite Rapids in 2024F.
Intel also projected that the data centre processors market (by revenue) could possibly see a low-20% CAGR over FY22-27F, from more than US$40bn in FY22 to exceed US$110bn in FY27F.
Full report here