In essence, options granted to Loke Wai San gives him the right to buy additional shares of AEM Holdings at a discounted price. As semiconductor nodes decrease and heterogeneous packaging becomes mainstream, the need for system level test (SLT) is likely to increase. The exact exercise price of the share options are undisclosed, but they range from S$0.196 to S$1.142, which represents a c.220% to c.1700% discount to the current market price. While best efforts are made to ensure the quality of our content, The Hatch Fund will not be liable for any gains/losses arising out of any recommendations made. Furthermore, Nvidia plans to create products for the server CPU market that combines Nvidia’s AI and GPU offerings with ARM’s offerings. The push for 7-nm chips will also likely require new kits and pans (consumables) for the testing of the new range of chips. While it is irrefutable that Intel WILL LOSE DATA CENTRE MARKET SHARE, it is equally important to consider that it will be doing so in a rapidly expanding market. AEM revised revenue guidance from S$460m – S$480m to S$480 – S$500m will likely be ignored by the market. And typically, as companies grow, it becomes harder to maintain a high level of profitability. OCBC Share Price, Glove/PPE makers: In 2020, AMD released its 7-nm CPUs which performed better than Intel’s chips for a fraction of the price. AEM Holdings Value Proposition Back-end test-equipment manufacturer that has co-developed the HDMT handler for a market-leading chipmaker with a market cap of USD210b. The key takeaways from the above developments are as follows: Furthermore, the cash receipt from this sale will place money in Intel hands for it to pursue R&D, CAPEX or other acquisition to better rival its competitors. While this may sound like good news, Teradyne and Advantest are about 10x larger than AEM. While I have not followed this market for long, it seems clear that engaging in acquisitions to break new ground is the name of the game. Well, no. Below are the selected comparable companies. We see FY21E as a growth year for AEM, driven by new products across customers including Intel, Huawei. AEM the volume so low unlikely moving up with such a small quantity eatup. UOB Share Price, To reduce China exposure ahead of rising trade tensions between China and U.S. AEM will benefit from competition in the PC segment in the short-term as Intel will ramp up chip production to fill the void created by its 7-nm delay and to keep up with AMD (similar game plan to its 10-nm delays). Market Cap (S$ Mn) P/B (x) Current FY20F FY21F Current TTM FY20F AEM HOLDINGS LTD AEM SP SGD 3.47 979 10.1 10.2 9.4 4.9 163% 7.8 6.6 - 76.2 102.8 … Intel is planning to sell its NAND memory business to SK Hynix. Find the latest AEM (AWX.SI) stock quote, history, news and other vital information to help you with your stock trading and investing. According to various sources, the rationale for Intel to carry out this deal include the following: Having caught up with the latest developments, here’s my take on how this is likely to affect AEM from a commercial point-of-view: Overall, I remain cautiously optimistic that AEM Holdings still has a lot of room to grow given that memory chips/SoC test equipment competitors like Teradyne (Intel’s other Automated Test Equipment (ATE) supplier) and Advantest (AMD’s ATE supplier) are about 10x bigger. On top of being the value-for-money alternative, AMD recently announced its Ryzen 5000 series chips and claimed that it is the “world’s best gaming CPU”, taking a direct shot at Intel’s Core i9-10900K processor, which Intel boasted as the “world’s fastest gaming processor”. This was swiftly accompanied by a 1.5 million share disposal (1 million indirectly held) by James Toh Ban Leng, who is the single largest shareholder and a NED/ID of AEM Holdings, and also the Founder and NED of Novo Tellus. AEM’s major customer has been building up its presence in other segments, such as server chips, given the sustained decline in the computing market. Independent Product Reviews. In this post, I look at the latest developments for AEM and its wider industry (integrated chip (IC) / personal computing (PC) / data center (DC)), before revisiting its financials/valuation to determine if it is still worthwhile to hold on to it. In essence, it is the money that is in excess of amounts needed to keep the company operational (after paying salary, rent, utilities, administrative expenses, tax, buying and maintaining machinery, etc. For a company, this ranges from political risks (e.g. In this first section, I take a commercial review of AEM Holdings based on the latest developments relating to the Company and its broader market. Now, let’s move on to the financial analysis. b. Intel’s sale of NAND memory business is unlikely to materially affect AEM’s performance as Intel will continue to operate its smaller Optane memory business, which has just reached break-even. Once government approvals have been obtained, SK Hynix will acquire from Intel the NAND SSD business, the NAND component and wafer business, and the Dalian NAND memory manufacturing facility in China, with the first payment of US$7b. From the charts above, AEM seems undervalued vis-a-vis peers (AEM falls below the red dotted line). Furthermore, s. , this will likely play to AEM’s advantage as more chips will be produced and, hence, tested. The sale of Intel’s NAND memory business might bog down AEM’s sales in the near term as there will be less chips to test post-deal, and hence, less consumables will be required (given the Optane is of smaller size). In the longer term, Intel’s competitiveness in the DC space will likely hinge on whether ARM-based chips can replace x86-based ones (Intel’s / AMD’s chips). Thereafter, I pared down revenues in FY23F and FY24F to ~S$450m levels. Following the sell-offs sparked by insider sales and global tech selloffs, AEM announced that it is raising revenue guidance from S$460m – S$480m to S$480m – S$500m for FY2020. Serves to further stoke my interest demand from new customers downside risks ( e.g from... Customers are also likely to increase almost every single computer or laptop you can find the. 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