SINGAPORE – AI-related demand continued to drive Singapore’s manufacturing output in the second quarter of 2026, primarily for electronics and precision engineering, but it was not enough to sustain the momentum of economic growth from the previous quarter.
The Republic’s economy expanded 5.7 per cent year on year in the April to June period, slower than Q1’s 6.3 per cent, according to the Ministry of Trade and Industry (MTI) on July 14. This expansion still surpassed the median forecast growth of 5.5 per cent by economists in a Bloomberg poll.
MTI said manufacturing during the quarter was largely driven by output increases in the electronics and precision engineering clusters because of strong AI-related demand for semiconductors and semiconductor manufacturing equipment, respectively.
But slower growth was observed in sectors such as construction as well as wholesale and retail trade.
Most analysts believe it would be difficult to outpace the growth Singapore’s economy recorded in the first quarter unless the volatile energy markets calm down. The situation has grown more uncertain once again after the recent flare-up of hostilities between the US and Iran, shattering the 60-day ceasefire they agreed on in mid-June.
Crude oil prices, which had dropped to a low of US$71 a barrel after the ceasefire deal was announced, have rebounded to around US$81 a barrel on July 17, though still far from the peak of US$120 in the weeks after the conflict began on Feb 28.
AI-related exports are set to remain the key growth driver for the second half of the year. However, analysts noted that lagged spillovers from the Middle East conflict and uncertainty surrounding energy and freight costs will likely moderate domestic demand and momentum, with household spending and business investment likely to be affected.
Disruptions to the supply of energy and other key inputs such as fertiliser and aluminium amid the blockade of the Strait of Hormuz will weigh on the global economic outlook, MTI said.
South Korea’s SK Hynix hardest hit in semiconductor share plunge
Increased AI demand has not boosted market sentiment on semiconductor companies, and it was a torrid week for chipmakers, with share prices falling as AI investments wane.
Bearing the biggest brunt was South Korean firm SK Hynix, the world’s leading AI memory chipmaker, which made its Nasdaq debut on July 10. Its Seoul shares posted their biggest one-day fall in nearly two decades on July 13, tumbling more than 15 per cent, as investors locked in profits.
Its American Depositary Shares (ADS) opened 14 per cent above the offer price at US$170 before ending their first trading day with a 12.8 per cent gain.
ADS are US dollar-denominated equity shares of a foreign company that can be bought and sold on US stock exchanges. They allow US investors to easily invest in international companies without dealing with the complexities of overseas trading, currency conversions, or differing trade practices.
Despite its strong debut, SK Hynix was unable to shake off the jitters that weigh on South Korean chip and memory stocks, with demand for the country’s specialised memory chips already forecast to exceed production capacity well beyond 2030.
After seeing a brief rally on July 15, its shares dropped 11.5 per cent on the Korea Exchange the following day, and closed the week 15.5 per cent lower.
The major sell-off could have been partially triggered by a Korea Investment & Securities report on July 13, which projected that SK Hynix’s operating profit for the latest quarter would fall short of estimates, adding to concerns that the company is overvalued.
Its domestic rival Samsung Electronics also saw its share price fall more than 8 per cent through the week despite reporting a 19-fold increase in quarterly profit.
The AI data centre boom has fuelled soaring demand for high bandwidth memory (HBM) chips. Samsung has unveiled its next-generation HBM4 chip, while SK Hynix is reportedly slowing the ramp-up of its own sixth-generation HBM chip in favour of higher-margin DRAM chips used in CPUs and conventional servers. This has raised doubts about SK Hynix’s ability to retain its lead in AI memory.
Samsung is also reportedly considering a US listing.
Analysts said the two South Korean chipmakers’ explosive growth has made them exceptionally volatile stocks vulnerable to sharp sell-offs, and their recent share tumble points to increasingly irrational investor expectations.
The slump also spilt into US markets, hitting other chipmaker stocks that have been performing well.
Share of Micron, SK Hynix’s top US competitor, dropped more than 13 per cent through the week, while Western Digital fell 18.1 per cent and SanDisk tumbled close to 30 per cent.
Singapore’s tech stocks were not spared from the sell-off.
AEM Holdings, a global leader in semiconductor testing, saw its shares fall on July 16, closing the week 9.5 per cent lower at $8.64.
UMS Integration, which has seen stronger advanced packaging and semiconductor equipment demand, fell 5.1 per cent over the week to $2.44.
Frencken Group, which supports operations in wafer fabrication, assembly and testing, dropped 4.7 per cent to $2.63.
Sheng Siong, Q&M eye expansions
Supermarket chain Sheng Siong is aiming to expand its current network of 90 stores and establish a new $520 million Integrated Headquarters and Distribution Centre.
Situated in Sungei Kadut, the new facility will be built on a site about 2½ times the size of its existing distribution centre in Mandai Link. It is expected to be completed in 2029 and will be able to support more than 120 stores.
Supported by JTC Corporation and Enterprise Singapore, the facility will feature automated storage and retrieval systems, robotics, intelligent warehouse management systems and multi-temperature storage zones.
Sheng Siong’s new facility is expected to be completed in 2029 and will be able to support more than 120 stores.
ST PHOTO: BRIAN TEO
The end-to-end automation will free manpower from repetitive and manual tasks, allowing warehouse staff to be reskilled to operate automation systems and perform technical maintenance, said Minister for Trade and Industry and Deputy Prime Minister Gan Kim Yong at the ground-breaking ceremony on July 13.
Others will be trained for e-commerce fulfilment and front-line retail roles, while new technical positions will be created to support the new systems.
Sheng Siong’s shares climbed through the week, hitting the week’s highest of $3.34, before falling back down on July 17 to close 0.3 per cent lower at $3.28.
Menawhile, Q&M Dental Group, Singapore’s largest private dental healthcare group, is setting its sights on building the largest dental company in Asia-Pacific.
On July 12, it announced that it will fully acquire Australian dental group Experteeth for around A$119.6 million (S$107.7 million). Experteeth operates 40 clinics across New South Wales, Victoria, Queensland, Tasmania and the Australian Capital Territory, under six brands including Elevate Dental Group, Lumiere Dental Group and Ace Dental Group, with a clinical team of about 120 dentists.
Q&M will also inject another A$30.4 million of equity into Experteeth Group on the deal’s completion, mainly to repay existing financing facilities and fund expansion.
Separately, it will also acquire a 51 per cent stake in Thailand’s Deezy Q&M Dental Group, a network of 33 dental clinics across the country, in which Q&M is already investing. The deal, worth around 994.5 million baht (S$38.2 million), will give the group an immediate, established presence in the Thai market instead of having to build its footprint from scratch, Q&M said.
Its chief executive Ng Chin Siau said Thailand has long been a market of interest for the group, and Deezy’s clinic network and reputation built over the years are a testament to its growth potential.
Both deals are valued at a combined US$113.2 million, with the transactions comprising cash and Q&M consideration shares issued at S$0.70 apiece, a 25.7 per cent premium to the stock’s volume-weighted average price of 55.7 cents on July 9, the last full trading day before the sale and purchase agreements were signed.
While the group is making moves in Thailand and Australia, it is holding back its plans in Malaysia for now.
It said on July 12 in a bourse filing that it will defer its plan for a secondary listing on Bursa Malaysia, which it first announced in April.
The company will continue to consider the suitability of the proposed secondary listing, “having regard to prevailing circumstances and the interests of the company and its shareholders”. It did not elaborate on the reasons for the deferral.
Shares of Q&M fell through the week and closed 2.7 per cent lower at 54 cents.
ComfortDelGro appoints newly created group COO
Transport giant ComfortDelGro announced on July 15 that it has appointed its first group chief operating officer. The role was newly created as part of the company’s wider strategy to strengthen global operations and grow across markets.
Mr Yap Chee Kean will join the company on Oct 15. He has more than 20 years of business and leadership experience across Asia and Europe, including scaling new businesses at various organisations such as Carlsberg Group and Jardine Matheson.
Since 2022, he has been co-CEO of Indonesian company Astra Digital Mobil, which runs used-car platforms and digital classifieds in the country.
As ComfortDelGro’s group COO, Yap will work closely with the group CEO, business leaders and senior management team to “strengthen performance discipline” and “drive consistent execution” across the global businesses, the company said.
Chairman Mark Greaves said establishing the group COO role is “an important step in strengthening ComfortDelGro’s top management bench”.
“Yap brings a strong blend of strategic, commercial and operating experience across Asia, and his appointment adds depth to the leadership team as the group continues to pursue disciplined and sustainable growth internationally,” he added.
In addition to its Singapore business, ComfortDelGro also operates its taxi and bus fleets in Australia and the UK, as well as Sweden’s Stockholm Metro. It is also aiming to enter the autonomous vehicle market in China.
Shares of ComfortDelGro briefly rose when the market opened July 16, following the company’s announcement, before paring gains later in the day. It closed the week flat at $1.34.
What to look out for next week
Several major US tech companies will be announcing their second-quarter earnings, which could see more volatility in the market.
They include Tesla, Intel, IBM and Alphabet, the parent company of Google.
In Singapore, Keppel DC REIT will announce its financial results for the first half of 2026 on July 23.
Singapore Airlines will hold its annual general meeting on July 24, where the continual losses from its stake in Air India are likely to raise questions from shareholders.
On July 17, the group defended its investment in response to questions from the Securities Investors Association (Singapore), noting that Air India has made “tangible progress” in its transformation across various business functions.
