After navigating a volatile 2024, the semiconductor industry is set to enter a broad-based recovery in 2025, with analysts pointing to Singapore-listed players such as Frencken Group and Grand Venture Technology (GVT) as potential outperformers. As the sector’s upcycle gains momentum, these companies are expected to benefit from emerging growth opportunities.
Global Semiconductor Market Rebounds
The semiconductor market’s struggles in 2023, driven by oversupply and weak macroeconomic conditions, gave way to a gradual recovery in 2024. While the upturn was slower than expected, analysts believe the worst is over.
“The semiconductor market is entering a super cycle, with double-digit growth expected in 2024 and 2025, followed by high single-digit growth in 2026,” said Rajeev Rajput, senior principal analyst at Gartner.
Alvin Nguyen, senior analyst at Forrester, highlighted that surging demand for artificial intelligence (AI) applications is fueling investments in advanced semiconductor fabrication and upgrading older facilities. AI, automotive, and communications sectors are projected to drive chip demand in the coming year.
Caution Amid Optimism
Despite the optimism, risks persist. Nguyen warned that AI-driven semiconductor growth could falter if chip production lags demand, forcing enterprises to rethink AI investments. Additionally, geopolitical tensions and export controls may complicate the acquisition of AI-specific chips.
Simon Woo, technology analyst at Bank of America Securities, observed that while the upcycle remains intact, chip pricing momentum has softened. “AI-related chipmakers are performing better than their non-AI counterparts, reflecting a decoupled trend in the market,” he noted.
Singapore’s Bright Spots: Frencken and GVT
As the recovery unfolds, Frencken and GVT stand out as key beneficiaries.
Frencken Group
Despite facing uneven demand recovery in 2024, Frencken’s long-term growth prospects remain intact. The company, which supplies components for semiconductor processes like wafer fabrication, reported a 6.7% year-on-year revenue growth to S$571.3 million for the nine months ended September 2024.
Maybank analyst Jarick Seet maintains a bullish outlook, citing Frencken’s diversified customer base and anticipated ramp-up in semiconductor orders by mid-2025. “Frencken remains our top pick in Singapore’s tech sector, with strong NPAT growth expected in the coming years,” Seet said.
Grand Venture Technology (GVT)
GVT reported stellar performance in 2024, with net profit after tax soaring 51.3% year-on-year to S$2 million in Q3, driven by a 52.8% revenue increase to S$43.5 million. DBS analysts Ling Lee Keng and Amanda Tan attribute GVT’s success to its strategic positioning in the AI-driven semiconductor value chain.
“GVT benefits from AI tailwinds, with involvement in front-end TSV deposition tools and back-end packaging technologies like hybrid bonding for high-bandwidth memory,” the analysts noted. These advanced technologies are critical for supporting the increasing processing power required by AI applications.
Geopolitical Tailwinds
The “China plus one” supply chain diversification strategy, spurred by US-China trade tensions, further strengthens the outlook for Singapore’s semiconductor players. GVT, in particular, is well-positioned to capture business from supply chains relocating to Asia.
Investor Takeaways
As the semiconductor industry moves into a high-growth phase, Singapore-listed companies like Frencken and GVT are poised to capitalize on the global uptrend. With strong fundamentals, exposure to AI-driven demand, and strategic positions in the value chain, these players offer compelling investment opportunities in 2025’s evolving semiconductor landscape.
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