AI chip demand drives Vietnam's 8.2% GDP as SEA splits

The AI boom is redrawing Southeast Asia's growth map. Economies with semiconductor fabrication, assembly and component capacity — Vietnam, Malaysia, Singapore — are outgrowing their neighbors precisely because global AI hardware demand remains unsatiated. Even Thailand's modest upgrade to 2.4% traces to increased data center investment, evidence that AI capital expenditure is now a macro force across the region.

Vietnam retained its crown as Southeast Asia's fastest-growing major economy in the second quarter of 2026, extending its run of outperformance while Thailand sat at the bottom of the regional growth league — a split that economists attribute squarely to two global forces colliding at once: the artificial intelligence boom and the energy price shock radiating from the Middle East conflict. Malaysia and Singapore ranked second and third, propelled by robust demand for semiconductors and other components used in global technology supply chains, while the Philippines joined Thailand in absorbing the cost of surging imported energy, with an added drag from a sharp pullback in infrastructure spending.

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Economies with semiconductor fabrication, assembly and component capacity — Vietnam, Malaysia, Singapore — are outgrowing their neighbors precisely because global AI hardware demand remains unsatiated.

The bifurcation is more than a quarterly curiosity. It quantifies how the 'China plus one' manufacturing shift is distributing its rewards unevenly across the region. Economies with companies embedded in the AI-related technology supply chain — from chip assembly and testing to components and logistics — are proving resilient, converting global AI hardware demand into exports, investment and growth. Economies more exposed to expensive imported energy are losing momentum, their fiscal and current-account buffers absorbing a shock that originated thousands of miles away. DBS Group Holdings economists Chua Han Teng and Radhika Rao framed the divergence precisely: growth is being 'dictated by the degree of domestic resilience in the face of the Middle East crisis and the share of exposure to technology exports' within the trade mix.

The forecast revisions published by Oversea-Chinese Banking Corp. on August 18 sharpen the picture. OCBC upgraded its full-year 2026 outlook for Vietnam to 8.2% and Indonesia to 5.2%, while cutting the Philippines to 3.2% from 3.8% — a 60-basis-point downgrade — and nudging Thailand slightly higher to 2.4%, a lift driven by a stronger private sector buoyed by increased data center investments. Notably, even Thailand's marginal upgrade is partly an AI story: data center construction is emerging as a distinct growth channel that decouples parts of the domestic economy from the energy shock. OCBC stressed that, despite differing fiscal policy responses to higher global oil prices, the balance of revisions remains skewed toward growth.