AEM Holdings Ltd (AWX.SI) saw its stock price plummet 3.43% in pre-market trading on Monday, following news of a patent infringement lawsuit filed against the company. Advantest Test Solutions, Inc. has lodged a complaint in the U.S. District Court for the Southern District of California, alleging that AEM and its subsidiaries violated two U.S. patents related to a wafer-level test system.

In response to the allegations, AEM Holdings has firmly denied any wrongdoing. The company stated that the referenced system is not used in its operations and has engaged U.S. legal counsel to contest the suit. AEM emphasized that this new filing does not affect its business operations, products, or ability to serve customers, and reiterated its revenue guidance for the second half of 2025 as previously issued on August 13, 2025.

Despite AEM's assurances, investors appear to be reacting cautiously to the news of potential legal challenges. The company has advised shareholders that it will provide updates on any material developments and urged investors to exercise caution when trading its shares. This lawsuit comes after both parties settled an earlier arbitration on July 28, 2023, adding another layer of complexity to the ongoing legal disputes between AEM Holdings and Advantest Test Solutions.