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Tailwinds remain strong for the semiconductor industry, which is at the heart of the global economy. We see a long-term uptrend going forward thanks to the various new demand drivers in place, including the acceleration of digital adoption driven by the pandemic, and the recent chip shortage issue.
The total semiconductor market is expected to grow at a CAGR of 8% from 2020-2025. As ASEAN gains prominence in the global semiconductor supply chain, keep a close eye in the foundries space, as well as equipment-related manufacturers riding on the semiconductor upcycle.
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Equipment-related manufacturers
We continue to like equipment-related manufacturers riding on the semiconductor upcycle.
AEM is a key beneficiary of the semiconductor upcycle and the ongoing semiconductor chip shortage reaffirms our view of the strength in demand from these structural trends. UMS is in a sweet spot to ride on strong global chip demand, on the back of the acceleration of 5G, AI, and other technology-driven developments.
Backend semiconductor service provider
Frencken is involved in both the front and backend space, and its strong presence in various key segments – Automotive, Analytical & Life Sciences, Medical, Semiconductor, Industrial Automation- has provided diversification benefits as well as resilience and stability.
Its growing semiconductor division, which accounted for 38% of 1H21 revenue, up from 30% in FY20 and c.20% in FY19, is the key growth driver.
An active, diversified US-centric portfolio of around 90 holdings that benefit from the development and use of Technology. Top holdings focus on large cap established leaders while also investing in a long tail of smaller and emerging technology companies.
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