AI boom powers Asia's factory expansion

Well next up, artificial intelligence is not just transforming technology, it is now giving a major boost to Asia's factories. So from chips and computers to other AI-related hardware, global demand is helping manufacturers across Asia expand, even as the West-Asia conflict pushes up costs and creates crush uncertainty. But the recovery is uneven and India is emerging as a key exception. The global AI boom is creating a manufacturing boom of its own. Strong demand for semiconductors, computers and AI hardware helped factories in several Asian economies expand in the month of August. China's private sector manufacturing PMI rose to 51.5 from 50.9 in the month of July. A reading above 15 means that the sector is expanding. The figure also beat the Reuters' full estimate of 51. So for China, the improvement is significant because its broader industrial recovery remains fragile. The rise in factory activity was supported by stronger output, new orders and exports, suggesting that the demand from overseas, particularly for technology products, is helping keep factories busy. But the official factory survey still showed contraction, highlighting that the recovery is in broad waste. Meanwhile, Japan is also benefiting from the AI-led demand wave. Its manufacturing PMI rose to 54.9 from 54.5 in July. That is the eighth consecutive month of expansion and the highest reading since April. And more importantly, new businesses grew at its fastest pace since January 2018, driven by demand for semiconductors and AI-related products. South Korea recorded its ninth straight month of factory expansion. Its PMI eased slightly to 52.3 from 53.1, but remained comfortably above the 15 mark. And the country's exports surged 68.7% in the month of August from a year earlier. This extends export growth to the 15th consecutive month. Technology is a major reason behind this trend. The AI effect is spreading across the region. Taiwan's PMI stood at 54.7, Malaysia at 50.2, while the Philippines jumped to 54.9. Indonesia, however, slipped into contraction at 39.8. So the Asian manufacturing sorry, is not uniform. And then there's India. Factory growth slowed to a five-year low, as weaker demand weighed on activity. The slowdown also triggered the first job losses in more than two years. That makes India an important contrast to the technology-driven factory expansion seen elsewhere in Asia. So the AI boom is doing more than powering data centers and technology companies. It is creating orders for factories that make the chips, computers, and hardware behind AI. But the question is, how long that demand can offset rising costs and geopolitical risks, particularly from the prolonged West Asia conflict. For now, AI is keeping much of Asia's industrial engine running.