SINGAPORE: The global push to build artificial intelligence infrastructure drove Singapore's non-oil domestic exports to their sharpest growth in over two decades in May, with analysts saying the country is well-placed to deepen its position in higher-value parts of the supply chain.One analyst traced the electronics surge to a "single concentrated force": Microsoft, Alphabet, Meta and Amazon collectively lifting their 2026 capital expenditure plans to more than US$700 billion in late April.“A handful of the world’s largest technology companies are all scaling toward this direction simultaneously, and the sheer size of those individual commitments is what’s moving supply chains,” said eToro market analyst Zavier Wong.Singapore's non-oil exports rose 38.4 per cent in May from a year earlier, extending the 24.4 per cent growth recorded in April, Enterprise Singapore said on Wednesday (Jun 17). Chief economist and head of OCBC Group Research Selena Ling described it as the highest rise in two decades.
Electronics exports led the expansion, rising 94.8 per cent in May, following a 66.7 per cent increase in April.As an electronics export economy, the direction is not new for Singapore. But the scale and concentration of demand have changed, said Mr Wong.“The export profile is reshaped by AI, though what we’re really seeing is an extreme acceleration of something that is already part of Singapore’s DNA,” he said.TECH EXPORTS DRIVING GROWTHIn May, exports of integrated circuits rose 80.9 per cent year-on-year, while disk media products and personal computers (PCs) increased 227.8 per cent and 140.9 per cent respectively.Each category plays a different role in the AI ecosystem, said Mr Ang Wee Seng, executive director of the Singapore Semiconductor Industry Association (SSIA).Integrated circuits – covering logic, memory, power management and connectivity – form the building blocks of AI systems. Disk media products support the large-scale storage and movement of data across data centres, which AI training and deployment demand at significant scale. PC demand is more indirect, driven by enterprise hardware refreshes, AI productivity tools and the early development of AI PCs that process workloads closer to the user.“So while not every dollar of export growth is AI-related, a significant portion of the electronics uplift is either directly or indirectly connected to AI demand,” he said. Singapore’s electronics exports feed into servers, data centres and networking hardware, which means a lot of that demand is tied to the capital spending decisions of a handful of large tech companies, Mr Wong said.“When those companies raise their spending guidance, the order flow moves upstream quickly,” he said.A growing share of demand is now linked to AI infrastructure, data centres, high-performance computing, advanced memory and storage, and efforts to build more resilient global supply chains.“This plays to Singapore’s strengths as a trusted semiconductor, electronics and advanced manufacturing hub,” he added.KEY EXPORT MARKETSNon-oil export figures for nine of Singapore's top 10 markets rose in May. Taiwan, the US and China recorded year-on-year growth of 135.2 per cent, 80.9 per cent and 31 per cent respectively.Mr Ang said Taiwan's strong showing reflects the continued scale-up of the global chip supply chain, given the island's central role in advanced semiconductor manufacturing and packaging.The US, home to many of the leading AI chip designers, cloud service providers and hyperscalers – massive cloud computing companies that build and operate large-scale data centres – saw demand closely tied to AI infrastructure investment.China, despite geopolitical restrictions, continues to require chips, storage and electronic components across consumer, enterprise and industrial applications as a large electronics manufacturer.“Singapore fits into this picture as a trusted and highly connected node in the global semiconductor supply chain, especially in specialty manufacturing, memory, storage, equipment, materials, assembly, test and regional supply chain coordination,” said Mr Wong.Indonesia was the exception, contracting 26.9 per cent. OCBC’s Ms Ling attributed the drop to weak domestic demand, likely compounded by volatility in the Indonesian rupiah.WILL THE SURGE HOLD?Analysts said non-oil export growth is likely to remain positive in the near term, though monthly figures may not sustain the same pace.A 38.4 per cent year-on-year increase is “very strong” and may be difficult to repeat as base effects rise in the second half of the year, with potential volatility from inventory cycles, geopolitics, tariffs and capacity constraints, Mr Wee said.Mr Wong said electronics exports “look durable” as long as hyperscaler capital spending holds."We’re witnessing an unprecedented AI buildout that requires ongoing hardware refresh at a pace much faster than any previous technology cycles, which will support continued demand as long as those commitments hold," he said.But with demand increasingly concentrated in a narrow set of products and customers, that concentration creates sensitivity.“If the hyperscaler spending gets revised down, the impact will be felt fairly quickly. It’s not the base case right now, but it’s a vulnerability worth keeping an eye on,” he said.
