AI Boom Boosts Asian Manufacturing Despite Middle East Tensions

The global artificial intelligence (AI) boom continued to support Asia's manufacturing sector in June, with strong demand for technology-related products offsetting disruptions linked to the conflict involving Iran, Reuters reported.

Technology-driven demand for chips and AI equipment boosted manufacturing activity across Asia in June.

Business surveys showed that price pressures remained elevated as supply shortages and shipping delays extended delivery times, suggesting that energy-related disruptions from the Middle East could continue to affect the region in the coming months.

Demand for semiconductors, data center equipment, and other AI-related products has become a key driver of growth, helping export-dependent Asian economies withstand mounting geopolitical and trade risks.

Manufacturing activity expanded in China, Japan, and South Korea, supported by strong demand for chips, computers, and other technology products, as well as inventory stockpiling amid concerns over supply shortages.

China's RatingDog General Manufacturing Purchasing Managers' Index (PMI) registered 51.7 in June, marking its seventh consecutive month of expansion.

Although slightly lower than 51.8 in May, it exceeded analysts' expectations of 51.6.