AI boom fuels Asian growth, but Southeast Asia’s surge may be fleeting

The AI boom is reshaping export dynamics across Asia, delivering unprecedented momentum in the region’s manufacturing sector.

AI boom lifts Asian economies, but Southeast Asia faces a fleeting surge

Taiwan is on track for its first double‑digit GDP increase since 2010, driven by soaring demand for AI hardware. Export growth in Japan, Malaysia, Singapore and mainland China exceeded ↑ 20% in July, while South Korea’s shipments jumped ↑ 60%. Second‑quarter GDP figures in Singapore, Hong Kong and Taiwan beat forecasts, anchored by electronics exports. Equity markets echoed the trend: shares of ChangXin Memory Technologies and Unitree rocketed over 450% on debut, and the Nikkei 225 and Thailand’s SET index are up roughly 25% year‑to‑date. Yet economists caution the benefits are uneven. “The sugar‑rush growth Southeast Asia enjoys stems from supplying supporting—not cutting‑edge—semiconductors and data‑center power,” warns Danny Quah of the Lee Kuan Yew School of Public Policy,

“These are commodifiable, offering no lasting comparative edge.”

Singapore recently lifted its growth forecast to 4.5‑5.5%, citing AI‑related exports, while Malaysia rolls out a national AI plan to climb the value chain. However, reliance on low‑cost labour, an ageing demographic and chronic energy shortages constrain the region’s capacity to host next‑generation data hubs. Reuters reports that the United States is urging countries to choose between the Pax Silica framework and China’s WAICO, a move that could force ASEAN members into a binary alignment. Bloomberg notes that China is building a full‑stack AI ecosystem to reduce dependence on U.S. technology. Analysts argue that Southeast Asia must treat the AI boom as a temporary lift, focusing on building local talent and resilient infrastructure rather than chasing fleeting export spikes.