IMF and S&P Global surveys show a slowdown in Asian manufacturing growth in October, particularly in Japan, South Korea and Taiwan, countries closely tied to the AI chip trade. South Korea’s PMI fell to 51.3, Japan’s to 53.3 and Taiwan’s to 54.9, while China’s official index dropped to 49.3, indicating contraction. The IMF forecasts regional growth will slow from 5.0% in 2025 to 4.8% in 2026 and 4.4% in 2027, and identifies a correction in AI-driven demand as a key risk. According to the IMF, a sharp demand adjustment could reduce Asian output by about 1.7% below the baseline, while the Bank of Korea estimates that slower AI-related investment could cut semiconductor exports by $50 billion to $100 billion and reduce South Korea’s GDP growth by 0.4 percentage point in 2027.
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