Singapore tech stocks slide as chip sell-off spreads in Asia despite CXMT surge
Frencken, UMS, AEM and CSE Global all fall on Tuesday
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[SINGAPORE] Technology and semiconductor stocks in Singapore slid on Tuesday (Jul 28) as a global memory chip rout that saw Applied Materials shares slide also spread in Asia.
Frencken , an Applied Materials supplier, took the largest hit and fell by 8.9 per cent by market close. UMS , also a supplier to Applied Materials, declined by 8.5 per cent.
The US-listed company’s shares were down by 5.2 per cent during the Tuesday US trading session in the morning, as it was caught in a broader sell-off of global semiconductor equipment makers.
AEM shares dropped by 8.5 per cent, while those of CSE Global fell by 4.9 per cent.
This followed a 5.8 per cent drop in shares of Dutch chipmaking giant ASML, spurred by The Information’s report that an unnamed state-backed company in China is now capable of the mass-production of immersive deep ultraviolet (DUV) lithography machines.
Such tools are considered to be a central workhorse of the semiconductor industry and are a core revenue stream for ASML, which is estimated to have cornered as much as 90 per cent of the total lithography market.
Fears around a threat to existing DUV makers quickly spread to ASML’s peers around the world, as Japan-based lithography equipment makers also took a hit. Shares of Nikon fell as much as 9.2 per cent, while those of Canon fell as much as 6.3 per cent – the biggest drops for both in more than two months.
In the broader artificial intelligence and memory sectors, Monday’s US trading session saw shares of AMD drop about 7 per cent and Micron fall about 5 per cent.
Nvidia, a key buyer of SK Hynix’s high-bandwidth memory chips, also dropped about 5 per cent. This followed a report inThe Wall Street Journal that the GPU and AI giant could provide about US$250 billion as a financial backstop for an OpenAI data-centre project.
This suggests that OpenAI could receive better financing terms, which may have stoked investor fears about circular deals reminiscent of the dotcom bust in the early 2000s.
But Morningstar senior equity analyst Brian Colello said he is keeping his US$280 target price on Nvidia, as it continues to appear undervalued.
“Given the high likelihood of strong AI capital expenditures in the near term, medium term, and likely the long term too, we believe Nvidia’s growth prospects are underrated,” he said on Monday.
The overnight weakness of US-listed tech counters like Nvidia carried into Tuesday for South Korean chip stocks, with Samsung Electronics and SK Hynix retreating as much as 9.5 per cent and 10.9 per cent, respectively.
Investors were likely rotating out of AI amid mounting concerns over financing risks tied to infrastructure spending and intensifying competition from China.
This followed the recent launch of Moonshot AI’s Kimi K3 model, which showed that Chinese-made models are closing the gap on American leaders OpenAI and Anthropic.
The Chinese startup’s AI model was said to be able to outperform all competitors in the field, except Anthropic’s Claude Fable 5 and OpenAI’s GPT-5.6. It released an update on the model weights and technical report of the model on Monday, and is poised for public download.
CXMT a new winner among tech plays? Analysts hesitate
The Tuesday bloodbath in regional technology and chip stocks was opposite to the surge in CXMT shares on Monday.
The memory maker became the most valuable company in China, beating out giants like Industrial and Commercial Bank of China, CATL and Alibaba, after its shares surged 466 per cent during the company’s Shanghai trading debut on Monday.
James Ooi, market strategist at Tiger Brokers, noted how CXMT’s initial public offering, which was reportedly more than 200 times oversubscribed, highlights “strong investor appetite” for China’s semiconductor localisation theme.
However, other analysts were cautious of the meteoric rise in CXMT shares and theorised the surge may be down to speculative investors.
“The closing price of 49 yuan (on Monday) was overdone in our view. We now view (CXMT) shares as considerably overvalued,” said Jing Jie Yu, equity analyst at Morningstar told The Business Times.
He said the Chinese semiconductor integrated device manufacturer still has “much catching up to do,” as a player two generations behind its peers.
This is on top of how it does not yet have access to some crucial high-energy systems, which will make it “increasingly difficult” for CXMT to further close this gap.
No longer about the best AI model
On a whole, amid intensifying competition, the race is no longer about who builds the best model, but who will capture the economic rent of the system, said analysts from asset manager BlackRock.
“We think cheaper AI changes the winners, not the investment case,” they wrote in a Monday note.
The analysts explained that the cost of the tech is emerging as a key concern for companies deploying it, as worldwide spending on AI models and platforms is expected to reach US$64 billion in 2026, up 63 per cent from 2025.
At the same time, Chinese models are now processing roughly 23 trillion tokens per week, compared with about 12 trillion tokens for US rivals.
“Together, these trends could erode the pricing power of frontier model developers even as AI adoption accelerates,” BlackRock said.
Companies therefore have a stronger incentive to contain costs through model routing and lower-cost models amid rising enterprise AI bills, with the analysts preferring AI infrastructure over the increasingly competitive model layer.
That said, unless the compute gap between the US and China is mostly closed, Chinese models that are cheaper will struggle to be more advanced than their US peers, said Chelsey Tam, senior equity analyst at Morningstar. This is assuming there is no technological breakthrough in architecture.
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