By Megan Cheah

Shares of Singapore-listed AEM Holdings fell after the company denied patent-infringement allegations from a California-based semiconductor-test equipment company backed by Japan's Advantest Corp.

The semiconductor test-solution provider's stock fell as much as 9.3% to 1.85 Singapore dollars, equivalent to US$1.44, on Monday before recouping some losses. The stock remains on track for its largest one-day percentage drop since April.

AEM said early Monday that Advantest Test Solutions filed a complaint in a U.S. court alleging that AEM and its subsidiaries infringed two patents related to a specific wafer-level test system.

The Singapore company denied the allegations, saying it doesn't practise that system. The complaint hasn't affected business operations, and AEM's revenue guidance for the second half of the year is intact, the company added.

This isn't the first time AEM and Advantest have been involved in legal proceedings. AEM and two Advantest entities settled a previous arbitration case in July 2023 after AEM made US$20 million in payments to the complainants.

Analysts at DBS Group Research noted that the earlier case resulted in elevated legal fees over 2021 to 2023, cautioning that the new lawsuit could affect profitability if legal proceedings are drawn out.

"While it remains too early to gauge the duration or cost impact of the case, we continue to monitor for signs of escalation," they said in a commentary. DBS has a buy rating and a S$2.10 target on AEM.

Write to Megan Cheah at megan.cheah@wsj.com

(END) Dow Jones Newswires

October 06, 2025 02:05 ET (06:05 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.