Asia Semiconductor Demand for AI Data Centres Surges on Regional Infrastructure Expansion

AI

Asia semiconductor demand for AI data centres is accelerating rapidly, driven by generative AI development, regional cloud infrastructure investment, and rising demand for high-bandwidth memory and logic chips. The shift marks a geographic rebalancing in semiconductor orders, which were previously centered on U.S. data centre growth.

AI, HBM, and Logic Chips Drive Semiconductor Orders in Asia

Dutch semiconductor equipment maker BESI reported increased orders from Asian subcontractors in Q1 2025, specifically for AI-related data centre applications. Orders rose 3.3% year-over-year and 8.2% quarter-over-quarter, even as other segments like mobile and automotive remained weak.

AI-centric devices are boosting demand for advanced semiconductor packaging, especially for high-bandwidth memory (HBM) 4 and logic chips. BESI received hybrid bonding orders from two memory producers and additional logic chip orders from an Asian foundry, underscoring regional momentum. Compound semiconductors and minor metals remain essential to meet AI’s performance, efficiency, and optical communication needs.

Chinese data centres, in particular, are preparing for broader adoption of optical technologies and laser detectors as they scale capacity to support domestic AI models like DeepSeek.

China, Singapore, and Malaysia Lead AI Data Centre Build-Out

China is rapidly scaling its AI data centre footprint. GLP, a Singapore-China investment firm, raised ¥2.6bn ($356.7mn) for a Beijing-area data centre and controls 20 data centres with a total capacity of 1.4GW across major regions. This expansion is backed by Chinese policy support for AI, cloud, IoT, and 5G development, with the country’s data centre market forecast to grow at a 38% CAGR through 2029.

Singapore remains southeast Asia’s largest data hub, hosting 1.4GW of capacity with expansion plans. However, regulatory restrictions on power and land usage are slowing growth. Meanwhile, Johor, Malaysia, is emerging as a new hotspot, with projected capacity of 1.6GW—poised to surpass Singapore.

Chinese firms have invested over $10bn in Malaysian data centres since 2019. Companies like ByteDance and Alibaba Cloud are leveraging Malaysia’s semiconductor-friendly environment to bypass U.S. export controls and support international operations.

The Metalnomist Commentary

The boom in Asia semiconductor demand for AI data centres signals a decisive shift in global digital infrastructure. As U.S. restrictions reshape supply chains, Asia is emerging as the new battleground for AI-optimized semiconductor and data centre development—anchored by domestic innovation and strategic capital deployment.