The global AI boom is spilling into the broader Asian economy, helping drive factory expansion from China to Japan and South Korea as demand surges for semiconductors, computers and other AI-related equipment, according to Reuters.
Manufacturing activity expanded across much of Asia in August, according to purchasing managers’ indexes, providing new evidence that massive investments in AI infrastructure are becoming an increasingly important source of economic growth.
China’s RatingDog General Manufacturing Purchasing Managers’ Index, compiled by S&P Global, rose to 51.5 in August from 50.9 in July, exceeding economists’ expectations. A reading above 50 indicates expansion.
The picture was even stronger in Japan, where manufacturing PMI increased to 54.9 from 54.5, its highest level since April and the eighth straight month of increases. South Korea’s PMI slipped to 52.3 from 53.1 but remained above the expansion threshold.
David Owen, an economist at S&P Global Market Intelligence, told Reuters that South Korean manufacturers were continuing to benefit from the “current AI and semiconductor supercycle.”
Factory activity also expanded in Taiwan, Malaysia and the Philippines, although Indonesia slipped back into contraction territory.