Key facts
- Singapore's non-oil domestic exports rose 38.4% year-on-year in May.
- Singapore's May export increase is the largest in two decades.
- Demand for AI-related electronics fueled Singapore's export growth.
- Japan's exports increased 17% year-on-year in May.
- Japan's exports have grown for nine consecutive months.
- A weaker yen and AI demand contributed to Japan's export rise.
- South Korea's central bank forecasts inflation above 2% through next year.
- The AI chip boom is creating inflationary pressures in South Korea.
- Longcheer Technology expects a 90% profit drop in Q1 2026.
- Longcheer Technology cited weakened consumer electronics demand.
- Taiwan is relaxing rules for insurers to invest in AI projects.
Artificial intelligence demand is significantly impacting global trade and economic forecasts across Asia. Singapore reported a substantial 38.4% year-on-year increase in non-oil domestic exports for May, marking the largest rise in two decades. This surge is primarily attributed to robust demand for AI-related electronics, such as integrated circuits. Despite this growth, a potential US tariff poses a future challenge.
Japan's exports also experienced a notable 17% year-on-year rise in May, continuing a nine-month growth streak. This expansion is credited to a weaker yen, elevated commodity prices, and strong demand for semiconductors essential for the AI boom. However, the volume of exports saw only a minimal increase.
In contrast, South Korea's central bank forecasts inflation to remain above its 2% target through the next year. This persistent inflation is driven by wage growth in the tech sector and rising public service charges. The bank highlighted that while global energy price volatility has stabilized, the AI chip boom is introducing new inflationary pressures.
Chinese electronics manufacturer Longcheer Technology anticipates a significant 90% year-over-year profit decline for Q1 2026. This sharp drop is attributed to a weakened consumer electronics market and increased investments in AI PCs and automotive electronics. The company's stock performance suggests this downturn was somewhat expected.
In a move to further bolster the AI sector, Taiwan is easing regulations for life insurance companies. This relaxation of rules aims to provide insurers with greater flexibility to invest in artificial intelligence projects, thereby fostering sector growth.