Singapore’s NODX continues to expand, further solidifying its economic resilience

• Singapore’s June NODX grew 20.7% year on year (YoY), moderating from May’s exceptional 38.4% expansion, as a higher base began to weigh on the headline figure.
• Electronic NODX surged 105.1% YoY, accelerating from 94.8% in May, led by integrated circuits (+115.4%), disk media products (+170.9%), and personal computers (+95.8%).
• Non-electronic NODX contracted 2.9% YoY, reversing from +17.7% in May, dragged by non-monetary gold (-49.0%, off a high base), food preparations (-38.6%), and petrochemicals (-27.9%).
• NODX to all top ten markets rose in June, led by Taiwan (+123.3%), the US (+36.7%), and South Korea (+62.9%).
• We maintain a positive view on Singapore equities, with a target price of 5,987 for the STI by the end of 2028, based on 15x FY2028E price-to-earnings, reflecting an upside potential of 8.3% as of closing on 21 July 2026, alongside an average dividend yield of approximately 4.3%.

Singapore’s June Non-Oil Domestic Exports (NODX) grew 20.7% year-on-year (YoY), moderating from May’s exceptional 38.4% expansion as base effects began to bite. NODX for 1H26 stands at 18.6% YoY, extending the momentum established earlier in the year. The moderation in the headline figure masks a widening gap beneath the surface: electronics accelerated further even as non-electronics turned negative.

Figure 1: Singapore’s NODX YoY Growth

Electronic NODX rose 105.1% YoY (May 2026: +94.8%), led by integrated circuits (ICs), disk media products, and personal computers (PCs), all directly linked to AI infrastructure and data centre buildout.

Non-electronic NODX, by contrast, fell 2.9% YoY, reversing from +17.7% in May. The decline was driven by non-monetary gold (-49.0%, falling from a high base a year ago), food preparations (-38.6%), and petrochemicals (-27.9%). Specialised machinery NODX partially offset the drag, rising S$0.7 billion, reflecting continued upstream semiconductor equipment demand — further confirmation that Singapore’s AI capex exposure runs deeper than finished electronics exports alone.

Related article: Singapore’s semiconductor stocks: Riding the AI-driven upcycle

Related article: Singapore's May NODX surges to 22-year high: AI integration runs deep, positive view maintained

Table 1: June 2026 NODX snapshot

Indicator	Reading (YoY%)
NODX	+20.7% (May 2026: +38.4%)
Electronic NODX	+105.1% (May 2026: +94.8%)
Non-Electronic NODX	-2.9% (May 2026: +17.7%)
NODX (1H26)	+18.6%
Top Electronic NODX Driver	ICs (+115.4%)
Top Non-Electronic NODX Drag	Non-monetary gold (-49.0%)
Source: Enterprise Singapore Media Release (published on 17 July 2026). Data as of 30 June 2026. Note: The growth in electronic NODX was driven by ICs (+S$1.9 billion), disk media products (+S$0.8 billion) and PCs (+S$0.5 billion). The decline in non-electronic NODX was driven by non-monetary gold (-S$0.9 billion), which fell from a high base from a year ago, followed by petrochemicals (-S$0.3 billion) and food preparations (-S$0.2 billion), partially offset by specialised machinery (+S$0.7 billion).

The geographic breakdown shows the US pulling back sharply — NODX to the US eased to +36.7% YoY in June from +80.9% in May, with electronic NODX to the US easing to +228.9% from +303.0%. This is consistent with our expectations as exporters have likely pulled shipments forward ahead of potential US tariff escalation, and June’s numbers show some of that payback risk materialising, even though the absolute growth rate remains elevated.

NODX to Taiwan accelerated to 123.3% on ICs (+265.3%) and specialised machinery (+52.3%), while South Korea grew 62.9% on IC demand (+385.7%), both continuing to anchor global AI hardware assembly and data centre deployment.

Table 2: NODX to top markets (% YoY growth)

Top Markets*	NODX (May)	NODX (Jun)	Electronic NODX (May)	Electronic NODX (Jun)	Key NODX Drivers (Jun)
Taiwan	135.2%	123.3%	218.6%	278.2%	ICs (+265.3%), specialised machinery (+52.3%), disk media products
US	80.9%	36.7%	303.0%	228.9%	Disk media products (+290.0%), PCs (+632.3%), measuring instruments (+34.5%)
South Korea	67.2%	62.9%	175.5%	145.9%	ICs (+385.7%), ores & precious metals, specialised machinery (+27.2%)
Malaysia	12.4%	35.3%	37.6%	52.8%	—
Thailand	43.5%	41.5%	16.8%	38.2%	—
Source: Enterprise Singapore Media Release (published on 17 July 2026). Data as of 30 June 2026. *Ranked by contribution to the YoY change in NODX levels over the year. The top 5 markets are based on each market’s percentage share of NODX in the preceding year.

Non-oil re-exports and total trade confirm broad-based strength

Non-oil re-exports (NORX) expanded 60.3% YoY in June, extending May’s 33.5% rise, driven primarily by electronic NORX (+83.1%, from +47.4% in May) with support from non-electronic NORX (+28.0%, from +14.3%). NORX to Taiwan (+191.7%), Thailand (+227.6%), and Hong Kong (+54.2%) led the expansion.

Total merchandise trade grew 49.3% YoY in June, extending May’s 39.6% rise, with total exports up 48.9% and total imports up 49.8%. Export growth was driven by both non-oil (+48.0%) and oil exports (+54.5%).

Demand visibility remains strong despite the electronics/non-electronics divergence

The Ministry of Trade and Industry (MTI) has maintained its 2026 GDP growth forecast at 2.0% to 4.0%, citing sustained AI demand as a supporting factor, though tempered by geopolitical risks. That MTI held the range steady rather than raising it, even as manufacturing and NODX both point to continued electronics strength, suggests policymakers remain cautious on the non-electronics and services side of the economy — consistent with the divergence already visible in June’s trade data.

June’s data does not mark a peak in the AI-driven cycle, but it does show growth becoming more concentrated: electronics is doing more of the work as non-electronics fades. This is consistent with our expectation that growth would moderate as base effects tighten even as the underlying demand cycle stays intact.

With Singapore being an export-oriented economy, strong trade numbers would also support its economic growth. Based on latest data, Singapore’s 2Q26 GDP grew 5.7% YoY (flash estimates), with manufacturing accelerating to 12.2% YoY (1Q26: +8.0%) on sustained AI-related demand for semiconductors and semiconductor manufacturing equipment — the swing from a 2.2% QoQ contraction in 1Q26 to 5.3% QoQ growth in 2Q26 is the clearest confirmation yet that this is a genuine capacity expansion, not a short-term inventory cycle.

The trend is also showing up at the company level. UMC, Taiwan’s second-largest contract chipmaker, brought its first mass-produced silicon photonics wafers to production readiness at its Singapore facility in July, targeting high-speed optical interconnects for AI and hyperscaler data centre networks. Vanguard International Semiconductor and King Yuan Electronics are separately expanding their own Singapore footprints, and Nvidia’s commitment to establish a research hub in Singapore reinforces the long-term ecosystem beyond the current capex cycle.

Related article: AI demand continues to confirm our case for Singapore equities

SGX-Listed Beneficiaries

Singapore accounts for roughly 20% of global semiconductor equipment production. It hosts front-end fabrication and advanced packaging for major memory players, positioning it across multiple high-value segments of the AI chip value chain.

UMS Integration (SGX: 558) supplies precision components for semiconductor manufacturing equipment used by Lam Research and Applied Materials (AMAT). UMS reported 1Q26 net profit of SGD 14.0 million, up 43% YoY, and guided for FY2026 to exceed FY2025, with a dividend yield of approximately 4.4%. UMS’s FY2026 guidance points to strong, 2H26-weighted growth driven by expanding production capacity. The company is also participating in next-generation advanced packaging technologies (an area expected to see rising demand as AI chips grow more complex) while a secondary listing on Bursa Malaysia is expected to further raise its visibility and market profile.

AEM Holdings (SGX: AWX) provides AI and high-performance computing test and handling solutions via its proprietary PiXL thermal management technology. 1Q26 revenue rose 36% YoY to SGD 116.9 million, with net profit surging 329% YoY. FY2026 revenue guidance was raised by approximately 20% to SGD 550 to 600 million. AEM's growth strategy centres on expanding beyond its historically Intel-concentrated customer base, including a new partnership with ASE Technology Holding (the world's largest chip testing and packaging provider) which could open access to major hyperscaler customers previously difficult to reach. Management estimates its addressable market could grow from USD 3 billion currently to USD 4.5 billion by 2028 (CAGR: 22.5%) — though after AEM's 400%+ YTD rally, much of this growth potential already appears reflected in its valuation.

Frencken Group (SGX: E28) offers diversified exposure through mechatronics manufacturing across semiconductors, medical, and automotive segments. Total revenue dipped 6.4% YoY to SGD 202.0 million in 1Q26 and net profit fell 20.2% to SGD 8.0 million as gross profit margin slipped marginally to 14.4% (4Q25: 14.8%) due to European segment weakness. In terms of outlook, they expect stronger business momentum in the 2H26 to drive overall revenue and profit growth for FY2026, despite a soft 1H26 impacted by foreign exchange volatility and inventory adjustments.

All three stocks have delivered strong year-to-date gains (AEM: +432%, UMS: +123%, Frencken: +94% as of 21 July 2026). However, we believe UMS Integration (SGX: 558) continues to offer the most attractive risk-reward opportunity. Compared with its peers, UMS has undergone a more moderate valuation re-rating, trading at 38.2x forward P/E versus 43.6x for AEM, while maintaining a superior net profit margin (20.2% versus 12.3% for AEM and 4.0% for Frencken).

Related article: UMS Integration: A structural re-rating built on earnings, not optimism

STI holds near record highs

Beyond these company-level beneficiaries, the broader AI-driven trade and manufacturing strength is also feeding through to the index as a whole — reinforced by two further supports beyond the electronics cycle: capital markets flows and safe-haven demand for Singapore banks.

• Capital markets add a separate, strengthening thread: Securities Daily Average Value (SDAV) reached SGD 2.1 billion in June 2026, and MAS expanded the Equity Market Development Programme (EQDP) from SGD 5 billion to SGD 6.5 billion at Budget 2026, with roughly SGD 2.6 billion still to be deployed in the second half.
• Singapore banks continue to be supported by optimism ahead of the August earnings season, resilient wealth management income, and safe-haven capital inflows. Reflecting this strength, DBS (SGX: D05) became the first Singapore-listed company to surpass a SGD 200 billion market capitalisation on 13 July, with its share price up 27% YTD.

We maintain our target price of 5,987 for the STI by the end of 2028, based on 15x FY2028E price-to-earnings, reflecting an upside potential of 8.3% as of closing on 21 July 2026, alongside an average dividend yield of approximately 4.3%.

Table 3: STI earnings table

STI	2025	2026E	2027E	2028E
PE Ratio (X)	15.2	16.2	15.1	13.8
Earnings growth (YoY%)	6.2%	11.9%	7.3%	9.0%
Projected Earnings Per Share (EPS)	305.0	341.3	366.2	399.1
Forward Dividend Yield (%)	4.7%	4.1%	4.3%	4.4%
Target Price (Based on 15X fair P/E Ratio)				5,987
Upside Potential (%)				8.3%
Source: Bloomberg Finance L.P., iFAST Estimates Data as of 21 July 2026

Figure 2: STI vs EPS chart

For investors seeking diversified exposure to this structural growth story, we continue to recommend positioning through the Amova Singapore STI ETF (SGX: G3B) for broad, low-cost exposure, and the iFAST-Amova Singapore Equity A SGD for investors seeking higher SMID-cap exposure beyond the STI 30 blue chips.

Related article: Singapore Outlook 2H26: Yield, growth and revitalisation in one market

Related article: Singapore banks: Higher expectations, dividend appeal remains intact

Related article: Q&A Series: iFAST-Amova Singapore Equity fund leads with a 61.31%* return over the past year

Declaration:

For specific disclosure, at the time of publication of this report, IFPL (via its connected and associated entities) and the analyst who produced this report hold a NIL position in the abovementioned securities.

This research report was prepared with the assistance of artificial intelligence (AI) tools. iFAST Financial Pte Ltd does not rely exclusively on AI for content generation; the content of this report, including all investment theses, ratings, price targets and conclusions, has been independently reviewed and verified by the research analyst(s) to ensure accuracy and professional integrity.