Singapore’s technology sector is experiencing a surge in institutional inflows and valuation expansion, primarily driven by demand in semiconductor testing, equipment, and AI hardware. This trend has positioned these segments as the main drivers of the sector’s re-rating in 2026. Companies such as AEM, UMS, and Frencken have led the valuation expansion, with price-to-earnings (P/E) ratios moving sharply higher, averaging around 50x and a median of 32x.
In the AI hardware segment, InnoTek has seen a significant re-rating, with a current P/E of approximately 83x and a forward P/E of about 22x for the financial year 2026. This reflects expectations of revenue growth as AI-driven capacity and customer traction increase.
The semiconductor value chain in Singapore spans from chip design to final hardware, with the local sector primarily focused on equipment, testing, and hardware. Among the 49 stocks in the sector, a dozen companies are directly involved in semiconductor production and testing. These include AEM Holdings, Sunright, and Global Testing Corporation, among others.
Institutional flows in 2026 have totalled S$582.5m, with the semiconductor production segment absorbing the majority of net buying. AEM Holdings, UMS Integration, and Frencken Group have been the top beneficiaries, driven by AI-driven semiconductor demand.
The hardware and systems segment, which includes companies like Venture Corporation and PC Partner Group, also saw positive inflows. This reflects a rotation towards semiconductor execution and AI hardware exposure, highlighting the sector’s robust growth potential.
