Daijiworld Media Network - Hong Kong

Hong Kong, May 31: Investors are increasingly turning their attention to Asian technology suppliers as a new wave of major artificial intelligence (AI)-related stock offerings in the United States is expected to trigger fresh spending on data centres, servers and computing infrastructure.

Market participants believe that planned fundraising by companies such as SpaceX, Anthropic and OpenAI could generate tens of billions of dollars in new capital, much of which may ultimately benefit manufacturers across Asia that supply critical hardware and infrastructure components.

The AI-driven boom has already transformed several Asian technology giants, including Taiwan Semiconductor Manufacturing Company (TSMC), Samsung Electronics and SK Hynix, which have emerged as major beneficiaries of surging demand for advanced semiconductors.

However, after sharp gains in semiconductor stocks, investors are increasingly searching for opportunities further down the supply chain, including manufacturers of electronic components, specialised materials, cooling systems, optical connectivity products and power equipment.

Analysts estimate that the anticipated public offerings by SpaceX, OpenAI and Anthropic could support an additional US$70 billion in AI-related spending, adding to more than US$750 billion already committed by major technology companies such as Meta Platforms and Amazon.

As AI infrastructure investment expands, several Asian component manufacturers have emerged as strong performers. South Korea's Samsung Electro-Mechanics and Japan's Ibiden have recorded significant gains this year amid rising demand for server and semiconductor components.

Investors are also exploring opportunities in companies that support chip manufacturing. Among them is Toto, known primarily for bathroom products but also a supplier of ceramic materials used in semiconductor equipment.

Industry experts say shortages are beginning to emerge beyond semiconductor manufacturing, creating opportunities for firms involved in advanced packaging, substrate production, chip testing, cooling technologies and server assembly.

Taiwan-based companies such as Hon Hai Precision Industry, widely known as Foxconn, Quanta Computer and MediaTek are viewed by investors as potential long-term beneficiaries of sustained AI infrastructure spending.

The growing adoption of AI in sectors such as robotics and autonomous vehicles is also creating opportunities for companies involved in what analysts describe as "physical AI". South Korea's LG Electronics is among firms expected to benefit from this trend through partnerships and technology development.

Power infrastructure is emerging as another key investment theme as AI data centres require enormous amounts of electricity. Investors are increasingly focusing on companies involved in renewable energy, nuclear power, transformers, fuel cells, cables and gas turbines.

In South Korea, firms such as HD Hyundai Energy Solutions and Daewoo Engineering & Construction have attracted investor interest, while in India, companies within the Adani Group are benefiting from investments in green-energy-powered data centres.

Despite optimism, analysts caution that the next phase of the AI investment cycle may carry greater risks. They warn that if future AI demand fails to justify the massive capital expenditure currently being planned, companies could scale back investments, potentially leading to excess infrastructure and pressure on valuations.

Nevertheless, investors remain optimistic that the expected fundraising by leading AI firms will provide fresh liquidity and sustain spending on computing infrastructure, creating new growth opportunities for a broad range of Asian suppliers beyond the semiconductor sector.