SINGAPORE — AEM Holdings’ chairman Loke Wai San is very positive about the growth prospects for the company, on the back of the adoption of new equipment and the tech sector rebound boosting demand for semiconductors.

Mainboard-listed AEM designs and builds high-density semiconductor test handlers used by the world’s leading chip manufacturers.

“We do believe that the semiconductor industry is in for a multi-year expansion,” said Mr Loke, in an exclusive interview with TODAY. “It’s not only the emerging markets that are adopting technology, it’s the first-world economies that are automating through robots and artificial intelligence, and big data analytics that are driving new ways of doing business,” he said.

Semiconductor manufacturing output expanded by 50.3 per cent year-on-year for the first three months of this year, supporting total manufacturing output growth of 8 per cent in the first quarter, showed data from the Economic Development Board (EDB) last month. The semiconductor segment takes up 17 per cent stake in the overall manufacturing basket.

The growth seen by AEM in recent months is partly attributable to the company’s next generation high density automated test handler, said Mr Loke.

The new equipment is a research and development product created with its “key client”, which supports over 80 per cent of the group’s revenue.

The surge in orders has been driving AEM’s financial performance over the last few months. While Mr Loke declined to reveal who AEM’s key customer is, research reports from banks have linked the company to semiconductor giant Intel.

AEM’s order book has more than tripled over the last few months. The company which reported a revenue of S$42.1 million in the first quarter, expects to achieve at least S$142 million in revenue for the first nine months.

The stellar report card has contributed to a spike in the company’s shares after its quarterly earnings result announcement last month. The stock had soared by about 80 per cent last month, achieving a high of S$2.65. The shares closed at S$2.48 on Monday, bringing the year-to-date return on the stock to 333 per cent, according to Bloomberg.

CIMB is bullish on the stock, giving it a target price of S$3.39, saying that the company’s “journey is just beginning” and “on track for a multi-year ramp”.

It seems the dark clouds that once loomed over the company have since passed. Founded in 1990 and listed 10 years later, the business has seen a reversal of fortunes in the past few years.

It was once held under scrutiny by the Corrupt Practices Investigation Bureau, with leaders of the company charged with bribery and immigration offences. The management has since been overhauled, but the company lost key accounts and undertook staff retrenchments.

Mr Loke joined the company in 2011. He is founder and managing director of private equity fund Novo Tellus Capital Partners and has steered the company around since taking charge. AEM went through major restructuring, such as the closing down of a non-profitable business.

Even back then, Mr Loke had already saw the potential of the firm despite the odds against it.

“Our view back then was this company was supplying handlers to the world’s top semiconductor company, which is a very difficult account to break into, and yet (this Singapore company) has been doing it for many, many years. That, to me, was an unrealised value,” he said.

“To be able to dance with the best, you have to be a pretty good dancer. We have been able to ‘tango’ with them, to develop pretty much the world’s most sophisticated test handler to meet their needs, good enough for them to adopt globally,” said Mr Loke.

The company is bullish about its future. It looks to expand its capacity in space and hiring. AEM has about 330 staff, and has plans to take on 50 to 70 engineering and production workers by the end of the year.

The role of manufacturing in Singapore is key, as long as Singapore wants to be innovative, shared Mr Loke.

“Manufacturing is important for any country that wants to be considered innovative. At the end of the day, if you are in the business of producing goods and services and you want to be innovative you do need manufacturing for a very quick feedback cycle,” he said.