3 SGX Stocks Riding the AI Hardware Supply Chain

Artificial intelligence needs hardware. Behind every AI model sits a chip, and behind every chip sits a long chain of companies that test it, build the tools that make it, and assemble the finished kit. Three of Singapore's billion-dollar technology names sit on that chain. Each feels AI demand in different ways and at different speeds.

AEM builds test and handling equipment for semiconductors, with a focus on high-parallel testing and thermal management for advanced chips. When a chipmaker ramps production, AEM's machines are part of the process. The numbers for the first quarter of 2026 show that ramp in full flow. Revenue rose 35.8% year on year to S$116.9 million. Net profit jumped to S$14.3 million, up 329.4% from S$3.3 million a year ago. Net margin widened to 12.3% from 3.9%.

The driver was AEM's Test Cell Solutions segment, which serves a fabless AI and high-performance computing customer. That segment grew 72.0% year on year to S$88.1 million and now makes up three-quarters of group revenue. Better product mix and higher volumes did the rest. AEM held S$72.9 million in cash against S$16.4 million in borrowings at the end of March, leaving it in a net cash position of S$56.5 million. The group declared no dividend for the quarter. It pays at the half and full year, and reinstated its dividend at S$0.013 per share for FY2025. Management raised its FY2026 revenue guidance to between S$550 million and S$600 million. The fabless AI customer is set to become AEM's largest revenue contributor this year.

AEM carries an Alpha Score of 58 out of 100, with a Moderate label. The stock page is here.

UMS Integration makes precision components and provides engineering services to makers of semiconductor equipment. Its first quarter looked strong on the surface. Revenue rose 20% year on year to S$69.4 million. The Semiconductor segment grew 21% to S$58.9 million, helped by a 26% jump in component sales from a new key customer shifting its supply source from the US to Asia. Aerospace added 18%. Net profit climbed 43% to S$14.0 million.

Part of that profit jump came from a foreign exchange gain of S$1.5 million, against a S$1.1 million loss a year earlier. Strip that swing out and the underlying improvement is smaller. The same weaker US dollar that helped the bottom line also squeezed the gross material margin, which slipped to 53% from 56%. Free cash flow turned negative at minus S$8.9 million, against a positive S$0.7 million a year ago. Higher working capital and bonus payments were the cause. The group still held S$34.3 million in cash against S$8.3 million in debt, and it declared an interim dividend of S$0.01 per share, unchanged from last year. Order flow from the new customer remains strong, and management expects a better FY2026.

Venture Corporation is the largest of the three, and the one furthest from chip production. It designs and manufactures products for customers across technology domains, integrating chips into finished kits rather than testing or making them. That position shows in the pace of its recovery. Revenue for the first quarter edged up 1.9% year on year to S$628.5 million. Earnings per share rose 0.9% to S$0.195, and net profit came in at S$56.3 million on a net margin of 9.0%. On a constant currency basis, revenue would have risen 8.2%, so currency masked stronger underlying demand.

AI is part of the story here too. Venture's Portfolio B, which includes test and measurement instrumentation, networking and semiconductor-related equipment, grew S$42 million year on year on AI-related infrastructure demand. That gain was nearly cancelled out by Portfolio A, where consumer lifestyle volumes fell S$30 million. Venture's balance sheet remains its anchor. It held more than S$1.0 billion in net cash at the end of March, even after paying higher dividends and buying back shares in 2025. Like AEM, it declares dividends at the half and full year, so none came this quarter. Management likened the result to new shoots in early spring and expects them to grow through 2026.

The difference in timing matters for anyone looking at these stocks. AEM sits closest to the chip and is seeing the fastest pull-through. UMS is growing well, though the quality of that growth deserves a closer read. The FX gain and margin compression mean the underlying earnings quality is weaker than the headline suggests. Venture sits furthest downstream, where the signal is quieter and the recovery is still early. For a dividend investor, the lesson is to look past the AI label and check what each business actually earns in cash. Growth headlines fade. Cash flow and a strong balance sheet are what keep dividends coming. AEM has net cash and growing earnings but no dividend this quarter. UMS has a dividend but negative free cash flow. Venture has massive net cash and steady earnings. The next catalyst for all three will be the half-year results, where dividends are declared and guidance gets updated.