Singapore and Malaysia exports surge on AI-driven electronics demand
5 min read
Singapore and Malaysia defied expectations with robust export growth in September 2025, driven by surging demand for electronics components amid a global artificial intelligence boom that has sent semiconductor demand to record highs.
Southeast Asian Trade Rebounds Beat Forecasts
Malaysia reported trade growth of 9.8% year-on-year to RM257.51 billion in September, with exports rising 12.2% to RM138.68 billion. The performance far exceeded economists' median forecast of 4.1% export growth, marking the second-highest export level of 2025.[1][2][3]
Singapore's non-oil domestic exports climbed 6.9% year-on-year, a sharp reversal from August's revised 11.5% decline and beating Reuters' forecast of a 2.1% contraction. Electronic product exports surged 30.4% after declining 6.5% the previous month.[4][5][6]
Electronics and electrical products led Malaysia's expansion, posting their highest value with an increase of nearly RM11 billion. Singapore saw integrated circuits rise 34.9%, personal computers jump 58.3%, and disk media products grow 42.9%.[3][5][1][4]
AI Demand Fuels Regional Electronics Boom
The export surge reflects broader momentum in the semiconductor industry, where artificial intelligence applications are driving unprecedented demand. Taiwan Semiconductor Manufacturing Company reported record third-quarter profits of $14.77 billion on Thursday, beating estimates by 39% as AI chip demand showed no signs of abating.[1][2][3]
"AI demand has been very strong—stronger than we thought three months ago," TSMC CEO C.C. Wei stated, leading the company to raise its 2025 revenue forecast to mid-30% growth. The global semiconductor market is projected to reach approximately $697 billion in 2025, with the AI chip market alone expected to exceed $150 billion.[3][4][5]
Malaysia's exports to the United States rebounded strongly with 24.4% growth to RM20.07 billion, while Singapore's major contributors to export growth were Hong Kong, Taiwan, and China. However, Singapore's exports to the US declined 9.9% due to a 10% tariff imposed by Washington.[6][7][8][9]
Regional Supply Chain Reconfiguration Amid Trade Tensions
The strong performance comes as Southeast Asian economies benefit from ongoing supply chain diversification driven by US-China trade tensions. Companies have been "front-loading" exports and production to avoid potential tariff increases, with the region positioning itself as a strategic manufacturing alternative.[1][2][3]
Thailand has emerged as ASEAN's top printed circuit board producer following 180 investment projects worth THB 200 billion since 2022. Vietnam recorded GDP growth of 8% in the second quarter, the highest in more than a decade, while Indonesia, Singapore, and Thailand also posted strong performance.[4][5][1]
Despite the positive momentum, challenges loom ahead. Singapore faces potential sectoral tariffs on pharmaceuticals, while Malaysia confronts concerns about China's tightening restrictions on rare earth exports that could disrupt semiconductor supply chains. Enterprise Singapore has forecast non-oil export growth of just 1% to 3% for the full year, expecting weakness in the second half of 2025.[6][7][8][9]
Reference sources:
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