Analysts see exports staying strong in H2 on AI demand, electronics cycle

Singapore’s NODX grew 24.2% year on year in July.

Singapore’s export growth is expected to remain strong in the second half of 2026 (2H26), supported by sustained AI-related demand and continued strength in the global electronics cycle, analysts said.

CGS International expects electronics exports to remain resilient in 2H26, underpinned by firm AI-related demand and semiconductors. It maintained its 2026 non-oil domestic exports (NODX) growth forecast at 16%, citing sustained AI investment and continued expansion across the regional technology supply chain.

CGS said Singapore’s strong electronics export performance suggests the country is benefiting from a broad-based AI-related supply chain upcycle rather than a temporary boost from US demand alone.

The research house said strong exports to China and Taiwan, particularly of integrated circuits and specialised machinery, point to robust semiconductor manufacturing and capacity expansion across the regional supply chain.

“We expect Singapore to benefit from this continued strength through its position in the regional semiconductor and electronics supply chain,” it said.

However, CGS cautioned that Singapore’s export growth has become increasingly concentrated in electronics, leaving NODX more exposed to a reversal in the global technology cycle. “A moderation in AI-related investment or an earlier-than-expected semiconductor downturn would therefore pose the key downside risk to our outlook.”

It also flagged uncertainty over US trade policy, including ongoing investigations and potential additional tariffs, which could weigh on business confidence and investment plans. Geopolitical risks were seen as a secondary concern, with tensions in the Middle East yet to materially disrupt electronics exports.

Singapore’s NODX grew 24.2% year on year in July, accelerating from 20.8% in June, whilst electronics NODX surged 112%.

Nomura also expects the global technology uptrend and broadening AI-related demand to remain intact in the second half of the year, maintaining its 2026 GDP growth forecast at 5.7%.

“The global tech uptrend and broadening AI-related demand, which has been sustained into Q3, as shown in the robust July NODX growth, is likely to remain intact, boosting output in electronics manufacturing, along with new capacity built,” it noted.

Nomura highlighted July NODX growth of 24.2% year on year, with electronics NODX increasing 112%, led by disk media products, PCs and integrated circuits.

“The surge in exports of disk media and PCs further support our view that AIrelated demand is broadening,” it noted.

Maybank similarly expects the strength in electronics to continue, pointing to the global AI investment cycle as a key driver.

“Demand is particularly strong for memory products, data storage solutions, semiconductor chips and server-related equipment with the hyperscaler capex and data center expansion globally,” it said.

Maybank also said AI-related demand remains a clear common denominator across most major export destinations. Electronic NODX growth exceeded 100% year on year in the US, Taiwan, South Korea, Hong Kong, India, Indonesia and the EU-27.

It added that non-electronics exports remained weak, with non-electronic NODX falling 2.3% year on year in July. The decline was concentrated in pharmaceuticals, petrochemicals, and food preparations.

Beyond NODX, Maybank said non-oil re-exports (NORX) expanded 51.3% year on year in July, following a 60.3% increase in June. Electronic NORX rose 75.2%, supported by integrated circuits, other computer peripherals and parts of PCs.

“Given Singapore's role as a regional trading and distribution hub, sustained NORX growth should continue to support wholesale trade services activity into the second half of the year,” the bank noted.