Output from Singapore’s semiconductors sector (accounting for 17% of total manufacturing activity) increased 41.7% YoY in October 2016, building on the 35.9% expansion seen in September. The global semiconductor industry also saw resurgent sales momentum.
Singapore-listed semiconductor stocks averaged a total return of 21.3% in the year-to-date, outperforming the FTSE ST All Share Index’s 5.2% total return in the same period. The three best-performing semiconductor stocks over the period were AEM Holdings (+152.4%), Avi-Tech Electronics (+55.6%) and Sunright (+54.6%).
The five largest semiconductor stocks in Singapore by market capitalisation are UMS Holdings, Micro-Mechanics, Ellipsiz, CDW Holding, and Avi-Tech Electronics. These five stocks averaged a 20.7% total return in the year thus far.
Singapore’s Economic Development Board (EDB) recently announced that Singapore’s total manufacturing output in October 2016 rose 1.2% YoY (or -1.4% YoY excluding biomedical manufacturing). The Electronics cluster was a bright spot, as its output in October increased 24.6% YoY, after 17.9% YoY growth in September 2016. Within the cluster, Semiconductors was the strongest segment, with output rising 41.7% YoY in October, building on the 35.9% YoY expansion seen in the previous month.
Singapore’s Electronics cluster has seen eight consecutive months of YoY output growth, with the Semiconductors segment enjoying even more robust expansion rates. (see chart below)
Source: EDB
Significant Global Rebound
The strength in Singapore’s semiconductor sector is in line with data from the Semiconductor Industry Association (SIA), which showed global semiconductor sales reaching US$88.3 billion – the industry’s highest-ever quarterly sales – in CY3Q16, reflecting a QoQ growth of 11.5%. Global Semiconductor sales in September reached US$29.4 billion, increasing 3.6% YoY. According to SIA’s President and CEO, the global semiconductor market has rebounded markedly in recent months, with September showing the clearest evidence yet of resurgent sales.
There are 12 Semiconductor and Semiconductor Equipment stocks as categorised by the Global Industry Classification Standard (GICS®) listed on the Singapore Exchange (SGX). These 12 companies have a combined market capitalisation of more than S$745 million. These 12 semiconductor stocks averaged a year-to-date total return of 21.3%, outperforming the FTSE ST All Share Index’s total return of 5.2% over the corresponding period. The three best-performing stocks within the sector in the year thus far are AEM Holdings (+152.4%), Avi-Tech Electronics (+55.6%), and Sunright (+54.6%).
The five biggest semiconductor stocks by market capitalisation are: UMS Holdings, Micro-Mechanics, Ellipsiz, CDW Holding, and Avi-Tech Electronics. These five stocks averaged a 20.7% total return in the year thus far.
The table below detail the 12 Singapore-listed semiconductor stocks and are sorted by market capitalisation. Click on each stock to visit its profile page on SGX StockFacts.
Source: SGX, Bloomberg & SGX StockFacts (data as of 28 November 2016)
The Full Picture?
The strength seen in Singapore’s manufacturing output for the Electronics cluster contrasts sharply with declines in the city-state’s non-oil domestic exports (NODX). According to a local media report, the NODX numbers may not provide a full picture of external demand for Singapore’s manufacturing activities. Investors should also look at two other main components of Singapore's total exports – services exports (which may include research and development activities) and non-oil re-exports (NORX), which refers to goods imported into Singapore and consequently re-exported out in the same form. For more details in the report, click
here.
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