Export split widens as electronics surge 94.8%

AI demand and Middle East energy prices are set to keep Singapore's export gap wide.

Singapore's electronics and non-electronics exports are seen to keep diverging, as elevated energy prices from the Middle East conflict continue to weigh on the non-electronics side.

“The K-shaped divergence between electronics and non-electronics NODX is likely to persist, as elevated prices following the Middle East conflict could weigh on non-electronics NODX,” UOB Global Economics and Markets Research said in its latest analysis.

Latest data from Enterprise Singapore showed that Singapore’s NODX rose 38.4% year-on-year in May, with electronics surging 94.8%, faster than the 66.7% growth in the last month, whilst non-electronic NODX grew 17.7%, following a 10.9% increase in April.

EnterpriseSG attributed the increase in electronics exports to integrated circuits (+80.9%), disk media products (+227.8%), and PCs (+140.9%).

UOB said that the latest data outperformed Bloomberg’s median forecast of 30.5% and UOB’s projection of 36.8%.

“The divergence between electronics and non-electronics NODX growth widened further in May, as electronics exports accelerated to 94.8% y/y (Apr: 66.7%), supported by the robust AI-driven buildout, whilst non-electronics exports grew at a more moderate pace (May: 17.7% y/y; Apr: 10.9%),” the UOB report read.

Zavier Wong, market analyst at eToro, said that the jump in electronics can be traced back to tech giants Microsoft, Alphabet, Meta and Amazon lifting their 2026 capital expenditure to more than $897b (US$700b), up 77% from last year's already record levels.

“That spending is flowing directly into chips, servers and data centre hardware. Singapore sits upstream in that supply chain, shipping integrated circuits, disk media products and PCs to manufacturers in Taiwan, who ultimately fulfil those orders,” he said.

Whilst the divergence is expected to persist, UOB noted that “energy prices have softened somewhat on expectations of an imminent peace deal, with a US–Iran agreement reportedly set to be signed in Switzerland.”

Wong said that the cumulative NODX growth through May stands at 18.1%, well above Enterprise Singapore's revised full-year forecast of 3% to 5%.

“The electronics side of the equation looks durable as long as hyperscaler capex continues to hold at the current pace,” he said.

“Pharmaceuticals' contribution is a trickier one, as questions remain as to how much of the recent strength gets pulled forward into June before the July 31 tariff deadline, now just six weeks away,” he added.

US$1 = S$1.2814

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