Although Singapore has largely gotten away with the lite version of US president Donald Trump’s “Liberation Day” tariffs, particularly when compared with other countries in Southeast Asia (SEA), some listed technology players with manufacturing footprints spread across the region and beyond will not be so fortunate in escaping unscathed.
While Singapore has made off with a 10% reciprocal tariff imposed by Trump, neighbouring Malaysia will see 24%, followed by Indonesia at 36%, Thailand at 36% and Vietnam at a whopping 46%. Leaders of semiconductor production Taiwan will see 32%, while China, which Trump had identified from the start as the original target will be hit with a 34% tariff, on top of the 20% levy that was previously announced, bringing the total to 54%.
As a result, DBS Group Research analysts Ling Lee Keng, Jim Au, Andy Yu, Amanda Tan and Sachin Mittal note that the most impacted tech players will be those with exports to the US.
They write in a Apr 3 report: “Venture (Venture Corporation), with its main manufacturing facilities in Malaysia but more than 50% of revenue for export versus those with a ‘local-for-local’ model, would be affected. While the company may be able to pass some of these tariffs onto customers, it could lead to higher overall costs at the initial stage, potentially affecting its pricing competitiveness.”
The group, which has the bulk of its production based in Penang and Johor within Malaysia, also operates additional facilities in Singapore, China, and the US.
With this widespread manufacturing footprint supporting the company's global reach, the analysts see that tariff impact is likely. They write: “While the company may be able to pass some of these tariffs onto customers, it could lead to higher overall costs at the initial stage, potentially affecting pricing competitiveness.”
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Tech manufacturer Aztech Global , with around 80% of its total revenue derived from its key US customer, could also be affected.
Currently, around half of the group’s production is sourced from its plant in Johor, with the remainder produced at its plant in China.
Although Aztech has commenced commercial production for five new products catering to a mix of both new and existing customers in the 4Q2024, as well as securing seven new customers to produce consumer and health-tech products throughout last year, the bulk of total revenue is still heavily reliant on its key US customer.
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“Given this significant exposure to the US market, the company is likely to be impacted by tariffs,” write the analysts.
Conversely, companies with a ‘local-for-local’ model, such as semicon players Grand Venture Technology (GVT), AEM Holdings (AEM) and UMS Group (UMS), are noted by the analysts to be the least impacted as their production is mainly for local consumption.
GVT, with its manufacturing model of aligning production closely with customer operations in each geography accordingly, could be insulated from the effects of tariffs, write the team.
They continue: “This approach minimises crossborder trade of intermediate goods and reduces exposure to tariff costs, especially when fulfilling orders within freetrade regions or through local supply chains.”
“We believe that this geographic alignment, coupled with its precision engineering capabilities, can enhance GVT’s stickiness with customers and position it as a strategic partner in a more regionalized and diversified global supply chain landscape,” add the analysts.
Despite this, trickle-down effects through the group’s customer base could yet affect GVT, add the analysts, should tariffs affect end-market demand.
The outlook for AEM is brighter, thanks to the group's tools serving as the plan-of-record solution for key customer Intel’s back-end test needs in client and server applications.
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The analysts write: “This reduces the likelihood of second sourcing, and we expect equipment demand to remain supported by non-cancellable purchase orders, providing near-term revenue visibility and stability. Additionally, most of Intel’s assembly and test operations are based in Malaysia, Vietnam, China, and Costa Rica, minimising direct tariff exposure, with New Mexico being the key exception.”
There is a risk of indirect exposure however, if chips tested offshore are shipped back to the US and end-demand weakens under tariff pressure, potentially reducing utilisation and consumables pull-through.
The group’s margins could also face some pressure if Intel delays ramps or reprioritises spending.
Meanwhile, tariff impact for AEM’s new artificial intelligence (AI) customer is expected to be limited, given its fabless model and chip manufacturing based in Asia. The analysts write: “AEM’s high volume manufacturing (HVM) tools are being installed directly at outsourced semiconductor assembly and test (OSAT) partner sites, avoiding direct US tariff exposure, though indirect risk remains if end-demand slows.”
Instead, the team notes that a sustained tariff regime could indirectly benefit AEM if it accelerates Intel’s foundry ambitions and reshapes global chip supply chains.
Should Intel capture a greater external customer share as foreign-sourced chips become more expensive for US-based customers, AEM could expand its total addressable market, especially as its handlers and consumables are adopted beyond Intel’s internal use.
On this, the analysts write: “However, we note that this opportunity is in its early stages and is contingent on Intel Foundry Services (IFS) successfully scaling its operations. This will take time as customer transitioning to new back-end solutions typically require long qualification cycles.”
For UMS, there will be a minimal tariff impact, note the analysts. The group operates its main production plant in Malaysia and has a significant presence in Singapore, with the semiconductor sector contributing 85% of total revenue for the FY2024.
In Singapore, the company maintains strong relationships with existing key customers, while in Malaysia, it is expanding its footprint by engaging with a new key customer with a robust presence in the country.
“This reflects the company’s local-for-local strategy, focusing on catering to regional market demands through a strong local presence to drive operational efficiency and growth in both markets,” writes the team.
Perhaps, the strongest of the lot is tech player Frencken Group (Frencken), to which the analysts see strength in its “beauty of diversification”
The group operates business segments across five key segments; semiconductor, medical, analytical life sciences, industrial automation, and automotive, allowing it to spread risk and tap into a wide range of market opportunities.
It also operates a network of diversified production plants located in the Netherlands within Europe, Malaysia, Singapore, and China, ensuring a broad geographic footprint that supports its global operations.
The analysts note that this diversification strengthens Frencken’s market presence and mitigates the impact of regional risks, including tariff changes.
They write: “Its diversified customer base further enhances stability, with the Netherlands accounting for the bulk of its 37% of total revenue in FY2024, followed by the US at 12%, the Czech Republic at 11%, Singapore at 9% and China at 7%.”
“The revenue from the Netherlands is mainly from its key semiconductor customer there, a local-for-local model, hence not affected by tariffs. This diversified approach significantly reduces the company’s vulnerability to tariff fluctuations, as its revenue streams are spread across different industries, regions, and customers,” adds the team.
Finally, Nanofilm Technologies (Nanofilm), with its supply chain dynamics largely spread across China and other parts of Asia, should also provide shelter from direct tariff impact.
Nanofilm’s main production facilities comprise two plants in Shanghai, along with facilities in Vietnam, Singapore, India, and Germany. The Shanghai plants, along with those in Vietnam and Singapore, serve as key supply chain hubs for consumer electronics.
They conclude: “Barring a complete reshoring of manufacturing to the US- a scenario deemed unlikely due to competitive disadvantages- the group is well-positioned to navigate the current market landscape.”
