Share price of semiconductor stocks surged 50% in November

Emergence of new technologies buoyed demand for advanced chips.

The share prices of pure semiconductor stocks listed on SGX surged about 50% over the last two months, according to a report by DBS Equity Research.

This was attributed to the strong results from some of the global tech players, and partly due to Singapore narrowly avoiding a technical recession.

Semiconductor shipments bottomed out in April after experiencing a decline since Q4 2018 weighed by geopolitical tensions, as the emergence of new technology such as IoT and AI brought in demand for more advanced chips and equipment.

In Singapore, DBS expects the manufacturing sector to worsen. Its decline eased to 0.4% QoQ from 4.2% previously. YoY, it contracted 3.5%, although attributed to a high base from the previous period.

DBS believes that semiconductor stocks can further strengthen, given an uptick in the global semiconductor shipments. Bigger global players in the semiconductor space like Applied Materials, Micron Technology, Intel and TSMC have also been optimistic in their outlook due to growing demand from 5G, IoT and data analytics.

Some of the recent activities involves JTC Corporation, who is building a semiconductor facility in Tampines with the first phase scheduled to be completed by 2021. Micron Technology also launched a wafer fabrication facility in the city in August, whilst ST Microelectronics doubled the capacity of its Ang Mo Kio facility in September.