Global: East Asian Semiconductor Supply Chain Supporting the AI Boom

■ China, Taiwan, South Korea, and Japan see continued significant export growth, primarily in semiconductor-related products.  
■ The dynamics of the East Asian AI-related product supply chain will serve as an indicator of the sustainability of the AI boom and any signs of change. 
 
China's trade statistics for August, released on the 8th, show that exports (up 25.0% year-on-year) and imports (up 28.2% year-on-year) both continued to grow significantly following July. In terms of exports and imports, information technology (IT) products needed for data center construction, such as integrated circuits (ICs) and computer-related equipment, continue to increase rapidly. China primarily manufactures and assembles final products; growth in final-product exports and component imports reflects continued global demand for artificial intelligence (AI) investment. 
 
The global AI boom is also reflected in the exports of related products from East Asian countries and regions such as South Korea, Taiwan, and Japan. Taiwan, a base for the contract manufacturing and assembly of advanced semiconductors and AI servers (high-performance computers), saw its export orders for information and communication equipment (July: up 108.2% year-on-year) continue to grow significantly, accelerating for the second consecutive month. South Korea supplies high-performance semiconductors, such as high-bandwidth memory (HBM) for AI, essential for high-speed computing in GPUs (graphics processing units). Its semiconductor exports (August: 209.1% year-on-year growth) continued to grow significantly in August, setting a new record high for the second consecutive month. While this surge in exports includes factors contributing to rising product prices due to increased global demand, it also directly reflects the demand for AI semiconductors. Japan exports semiconductor manufacturing equipment, testing equipment, silicon wafers, and electronic components needed for semiconductor production to semiconductor manufacturers in Taiwan and South Korea. Although the export growth rates of Japanese semiconductor manufacturing equipment (July: 40.7% year-on-year growth) and electronic components such as semiconductors (July: 49.1% year-on-year growth) are relatively lower compared to Taiwan and South Korea, which directly reflect rising final demand and product prices, Japan is upstream in the advanced semiconductor supply chain. Therefore, its export performance will continue to serve as a leading indicator of semiconductor supply, showing that the strong momentum in semiconductor demand remains intact.  
 
As the largest source of AI demand, the United States has seen a significant increase in capital goods imports, primarily in computers, computer-related products, semiconductors, and communication equipment. While this includes the impact of price increases, there are currently no signs of a slowdown in the AI boom. Before the AI boom, semiconductor supply and demand repeatedly experienced cyclical fluctuations known as the "silicon cycle," lasting 3-4 years. However, with the construction of AI infrastructure, demand began to consistently exceed supply, causing semiconductor sales to break through previous cycles and exhibit rapid growth. With the excess demand driving price increases yet to be eliminated, semiconductor export value is expected to remain high. When, at what speed, and through what means supply and demand balance will determine the extent of the economic impact of the AI boom's end. By observing trends in supply chains for advanced semiconductors and other AI-related products in East Asian countries and regions, it is possible to spot early signs of the AI boom's sustainability and potential shifts.