In 2026, the global economy faces broad uncertainties, from Middle East conflicts pushing up energy prices and inflation to U.S. trade tax policies. Nevertheless, amid these negatives, AI investment remains a key driver supporting global economic growth. Bloomberg Consensus estimates show that U.S. tech giants’ hyperscaler investments will rise from $770 billion in 2026 to $960 billion in 2027 (a 24.7% year-over-year increase), to expand data centers and AI infrastructure. This amount equals Taiwan’s entire economy and surpasses the full size of Thailand’s economy.
These investments require vast amounts of electronics and semiconductors—from processing chips, memory chips, servers, to power supply and cooling systems. The Asia-Pacific region is the world's key production base at nearly every stage of this AI-related supply chain. As a result, it directly benefits from the AI investment cycle through electronics exports and digital investments in data centers and cloud services. However, the AI benefits differ among Asia-Pacific countries depending on their position and value added in the AI supply chain. There is also risk from the AI investment cycle, currently driven more by AI infrastructure investment than electronics demand; if large tech companies slow investments, demand for supply chain products may decline.
Examining Asia-Pacific’s overall export data shows that electrical and electronics (E&E) products significantly support growth. In 2025, exports of E&E products from 14 Asia-Pacific countries grew 16.1% year-on-year, and in the first three months of 2026, this growth accelerated to 32.9% year-on-year. Meanwhile, exports of other product groups shrank by 2.4% year-on-year. This contrast indicates that growth in these countries concentrates in electronics manufacturing and AI-related supply chains, rather than being broadly distributed across all economic sectors as in the past.
The importance of electronics exports is a key factor behind the International Monetary Fund’s (IMF) April 2026 forecast that the Asia-Pacific economy will grow about 4.4% this year, significantly higher than the global growth rate projected at just 3.1%.
Countries upstream in the AI supply chain such as Taiwan, South Korea, and Japan are likely to benefit the most from AI industry growth because they hold core technologies and knowledge essential to the supply chain. This includes advanced processor chip production, memory chips, and semiconductor manufacturing equipment and materials. Consequently, only a few producers, such as Taiwan’s TSMC and South Korea’s SK Hynix and Samsung, have strong bargaining power and can maintain good profitability.
Countries midstream to downstream in the supply chain, including Singapore, Malaysia, Thailand, and Vietnam, also benefit from expanded electronics manufacturing and data centers. However, the gains differ based on each country’s expertise. Singapore and Malaysia have well-established semiconductor industries covering stages from equipment manufacturing to chip assembly and testing, giving them a competitive advantage. Meanwhile, Thailand and Vietnam mainly engage in assembly, testing, and packaging—labor-intensive activities with lower added value—resulting in less bargaining power and fewer opportunities for high returns compared to upstream countries.
The differing roles of countries in the global AI supply chain reflect at least two implications: 1) Economic returns depend on each country’s role within the AI production chain; countries controlling upstream high-value technologies and knowledge gain greater economic benefits than those in mid-to-downstream stages. 2) The sustainability of competitive advantage varies by role; upstream countries face lower short-term replacement risk, while those focusing on assembly, testing, and packaging confront cost competition, productivity pressures, and relocation risks if other countries offer better cost conditions or investment incentives.
Thailand’s economy clearly benefits from AI and data center investment trends, with electronics as its top export sector. In the first half of 2026, electronics exports grew strongly by 53.6% year-on-year, mostly destined for the U.S. market. Bank of Thailand data based on 2025 Customs Department records show that only about 1% of Thai exporters (approximately 105 companies) involved in technology-related products account for 85% of Thailand’s tech exports. This indicates export growth is concentrated among large operators. Additionally, this industry heavily depends on imported parts, materials, and machinery, with imports accounting for about 70% of the export value from January to April 2026.
Therefore, despite strong growth in Thailand’s electronics exports, the domestic value added may be limited because some income flows back abroad through imported materials and parts. This limits the positive impact of export growth on Thailand’s income, employment, and productivity enhancement across the broader economy.
Although AI investment and the electronics industry are major growth drivers for Asia and Thailand through exports, private investment, and capacity expansion, key challenges remain—especially the sustainability of the AI investment cycle.
Looking ahead, the AI investment cycle may face pressures from supply constraints such as limited advanced chip production capacity, insufficient power grid infrastructure for data centers, and shortages of skilled labor. These factors could slow AI industry growth below market expectations. Furthermore, the cycle’s sustainability depends on long-term demand expansion. As AI is still a new technology, market size and revenue potential remain highly uncertain. If demand or investment returns fall short of expectations, major tech companies might reduce or delay investments, impacting demand for products in the AI supply chain.
In this context, if AI investments continue to grow, countries in the region will benefit from electronics exports and digital infrastructure investment. Conversely, if the AI investment cycle slows, the effects may inevitably impact manufacturing, exports, and economic growth across Asia-Pacific and Thailand.
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