Asian tech companies' AI capital expenditure is expected to increase by 15% this year, with Singapore's AI product exports accounting for over 40% | Lianhe Zaobao

The investment boom in artificial intelligence (AI) continues, with Asian tech giants expected to increase their AI capital expenditures by 15% this year, reaching $139 billion (approximately SGD 178.9 billion). Several Asian economies, including Singapore, are benefiting from the growing demand for AI, primarily through the export of related products, investment in semiconductor fabs and data centers, as well as consumption growth. Meanwhile, Southeast Asian economies have deeply integrated into the AI supply chain. According to a recent report from financial services firm Nomura, the export ratio of AI products in the Philippines is as high as 45%, followed closely by Singapore and Malaysia, with export ratios of 41.1% and 38.8%, respectively. The export ratios of AI products in South Korea, China, Japan, and Thailand range from 16.9% to 28.3%. India and Indonesia have the lowest ratios, at less than 4%. The report points out that Asia, as a global hub for AI hardware manufacturing, derives its revenue mainly from exports, followed by investments, while the revenue from consumption is relatively limited. This contrasts with the United States, which primarily benefits through investments. Analysts believe that future capital expenditures will focus more on establishing advanced node production capacity, high-bandwidth memory chips, AI servers, data centers, and advanced packaging. To meet the demands of AI workloads and cloud applications, the Asia-Pacific region is continuously building data centers, with total operational capacity expected to grow from 12.6 gigawatts in the first half of 2025 to 26.1 gigawatts by 2028. Notably, the capacity growth in China, Japan, Malaysia, and India is particularly significant. Participation of Asian Economies in the AI Value Chain Varies Further Reading Vietnam Telecom Group Viettel Begins Construction of Its First Chip Manufacturing Plant TSMC Executives: Expanding Investment in the U.S., Most Advanced Technology Remains in Taiwan The report also mentions that the participation of various Asian economies in the AI value chain varies. Taking Singapore as an example, its advantage lies in participating in the high-value assembly of high-precision components, as well as its role as a regional data center and high-value service hub. South Korea, leveraging its leading position in high-value manufacturing, has become a major beneficiary of the US AI capital expenditure boom. China's AI exposure is also high, with its AI ecosystem primarily concentrated domestically. Malaysia and Vietnam have moderate levels of AI exposure, with Malaysia attracting significant investment in large data centers, backend assembly, testing, packaging, and AI server assembly. In contrast, the direct spillover effects of the global AI investment boom on markets such as Thailand, India, and Indonesia are relatively limited. The report points out that the global technology cycle remains strong, helping to boost manufacturing output. Additionally, Singapore faces lower tariff rates, coupled with active export transshipment, which is expected to continue supporting the development of trade-related services