Global investors are shrugging off Iran worries and returning to markets in Asia, the ‘backbone of the whole AI value chain’
Asian stock markets, particularly in East Asia, have rebounded despite the ongoing Iran conflict, driven by strong demand for AI-related technology and semiconductor manufacturing. While wealthier economies like Taiwan, South Korea, and Japan benefit from their central role in the global AI supply chain, emerging markets in South and Southeast Asia face challenges due to energy shortages and governance issues. Investors are increasingly looking at Southeast Asia's potential for infrastructure and green energy development as energy security becomes a critical concern amid disrupted fuel supplies.
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Asia’s stock markets have rebounded since the outbreak of the Iran war over two months ago, as the AI boom lifts the fortunes of manufacturing economies like China, South Korea, and Japan.Recommended Video “Asia was outperforming global markets before the Iran conflict started,” Charu Chanana, Saxo Bank’s Singapore-based chief investment strategist, tells Fortune. While there was an initial pullback following the war’s outbreak, “things have started to recover in the last two weeks and Asia is outperforming again”. One reason is growing demand for AI and its related infrastructure. Asia houses three-quarters of the world’s semiconductor manufacturing, so a global surge in demand for AI processors and memory chips is lifting the fortunes of chip and chip-related companies.
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