During the California Gold Rush, the merchants selling pickaxes and denim jeans often fared better than the prospectors panning for gold.
A similar dynamic is playing out in the AI boom.
While investors bid up shares of chip designers and AI software companies, a quieter opportunity exists among the businesses supplying the physical backbone of the AI revolution.
Three Singapore-listed small caps – spanning data centre infrastructure, semiconductor equipment, and precision consumables – are positioning themselves to capture this demand.
CSE Global: Powering the Data Centre Boom
When Amazon (NASDAQ: AMZN) secured rights to acquire up to 63 million shares in CSE Global (SGX: 544) in November 2025, the move validated the systems integrator’s pivot towards data centres.
The strategic partnership, extending through 2030, signals where the cloud giant sees opportunity.
AI workloads are notoriously power-hungry, requiring massive computing infrastructure with sophisticated electrification and automation systems.
CSE Global, operating across 15 countries with over 2,000 staff, delivers precisely these capabilities.
For the first nine months of 2025 (9M2025), revenue rose 8.7% year on year (YoY) to S$698.6 million.
The Electrification segment – most relevant to data centre power infrastructure – led with 12.4% growth to S$361.4 million.
Communications revenue climbed 8.2% YoY to S$189.7 million following acquisitions in the United States.
While order intake declined 9.3% YoY to S$512.8 million, this largely reflected timing as the prior year included major one-off projects.
Nonetheless, CSE Global’s order book remained healthy at S$467.5 million as at 30 September 2025.
UMS Integration: Manufacturing the Tools That Make AI Chips
Every AI chip requires sophisticated front-end manufacturing equipment.
UMS Integration (SGX: 558) supplies critical components to the original equipment manufacturers building these machines.
For the third quarter of 2025 (3Q2025), revenue declined 9% YoY to S$59.3 million.
However, the headline masks an important development: sales in Malaysia surged 71% YoY as shipments to a new major customer commenced.
Margins improved notably.
Gross material margins rose to 58.2% from 51.7%, driven by product mix changes and productivity gains.
Despite lower revenue, net profit edged up 1% YoY to S$10.5 million.
UMS’s free cash flow turned negative at S$10.8 million in 3Q2025 due to a S$12.6 million quarterly investment in its Penang expansion, a strategic move to ramp up capacity for anticipated AI-driven demand rather than operational weakness.
The balance sheet remains robust with S$38.2 million in cash and zero debt.
With that, UMS declared an interim dividend of S$0.010 per share.
According to SEMI, global semiconductor equipment spending reached US$107 billion in 2025, rising 7% YoY.
Micro-Mechanics: Consumables for the Chip Production Line
While UMS benefits from equipment manufacturing, Micro-Mechanics (SGX: 5DD) profits from ongoing chip production through its consumable precision tools.
Higher chip volumes translate directly to higher tool consumption, a recurring revenue model tied to semiconductor output.
The consumable tools segment hit a 13-quarter high of S$13.7 million for the first quarter of the fiscal year ending 30 June 2026 (1QFY2026), up 7.9% YoY and contributing 82.2% of total revenue.
Overall revenue rose 2.9% YoY to S$16.7 million, while net profit grew 2.7% to S$3.2 million.
Gross profit margin improved to 51.5% from 50.7% while free cash flow surged 35.7% YoY to S$3.8 million.
The balance sheet stands out: S$27.2 million in cash with zero debt.
World Semiconductor Trade Statistics forecasts 9.9% industry growth in 2026 to US$800 billion, which should support consumables demand.
Get Smart: Three Entry Points Along the AI Value Chain
These three Singapore small caps won’t capture the headline gains of AI chip designers.
What they offer instead is exposure to the structural build-out – the physical infrastructure, equipment, and tools required to turn AI ambitions into reality.
CSE Global delivers data centre power systems, UMS Integration supplies chip manufacturing equipment, and Micro-Mechanics provides production consumables.
All three face semiconductor cycle volatility, and AI-driven demand could moderate if enterprise spending normalises.
For investors seeking indirect plays on the AI boom, however, this trio offers three distinct entry points.
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Disclosure: Calvina Lee does not own any of the stocks mentioned. Chin Hui Leong contributed to the article and owns shares of Amazon.
