Manufacturing hubs from Tokyo to Taipei are riding a wave of unprecedented demand for semiconductors and data-center infrastructure. Japan’s PMI reached 54.8 in June, its strongest quarterly performance in a decade, while Taiwan recorded its sharpest production spike in nearly five years. Frederic Neumann of HSBC notes that manufacturers are currently insulated by record trade levels, though the reliance on AI-related capital expenditure creates vulnerability should financial market volatility tighten funding for future expansion.

Beneath the surface, the recovery remains fragmented. Rising material costs and supply chain bottlenecks are forcing firms to stockpile goods as a defensive measure against further price hikes. South Korea’s manufacturing sector saw new order growth soften significantly in June, while Indonesia slipped into contractionary territory with a PMI reading of 46.9. According to S&P Global’s Annabel Fiddes, the disparity is stark: the AI hardware boom favors specialized exporters but offers little relief to economies less integrated into the tech supply chain, where high living costs continue to suppress domestic consumption.