Singapore key exports surge 15.3% in March on AI-driven electronics demand

SINGAPORE - Singapore’s key exports accelerated in March as electronics shipments jumped on the back of strong artificial intelligence demand.

Despite the Iran war breaking out at the end of February, March saw non-oil domestic exports (NODX) growing for a seventh consecutive month, according to figures released by Enterprise Singapore on April 17.

NODX rose 15.3 per cent in March year on year, higher than the 4 per cent growth in February. It also topped an 8.1 per cent increase forecast by analysts in a Bloomberg poll.

UOB associate economist Jester Koh said: “There are limited signs of impact from the Middle East conflict so far, as developments since Feb 28 have yet to show up in March trade data.”

He said that petrochemical exports fell, but by a narrower margin compared with in the months before, and that oil import volumes only slightly declined month on month.

“We think April, and more likely May, data will provide a more accurate assessment of the extent of the impact from the Middle East conflict,” he said.

But electronics demand should remain a bright spot for the first half of 2026, analysts said.

Electronics NODX in March surged 74 per cent year on year due to AI-related demand and a low base a year ago.

Integrated circuits – or semiconductors – were the star performer, with shipments soaring 113.8 per cent. Chips accounted for $1.7 billion of the $3.1 billion in electronics exports in March. Exports of personal computers rose by 57.3 per cent, and disk media products by 78.3 per cent.

However, non-electronics NODX fell 0.6 per cent, though this was a smaller decline than the 6.9 per cent drop in February.

The spending boom on AI appears unscathed from the Gulf war disruptions, Maybank analysts Chua Hak Bin and Brian Lee said.

“Outperformance in electronics exports will help to offset the Gulf war drag on non-electronic segments, as producers are hit by higher energy prices and raw material disruptions,” they added.

OCBC chief economist Selena Ling observed that Taiwan chip giant TSMC had raised its revenue outlook for 2026, citing strong demand for AI chips. This suggests that the industry outlook remains bullish despite concerns about the economic fallout from the Iran war, she said.

DBS senior economist Chua Han Teng said: “Electronics exports momentum will continue to benefit from sustained global AI-related tailwinds and strong demand for Singapore’s memory chips and server products.”

On the non-electronics side, exports of structures of ships and boats plunged 99.8 per cent. Food preparations fell 42 per cent, while pharmaceuticals declined 18.4 per cent.

Within its top 10 markets, Singapore’s key exports to Hong Kong, Taiwan and China grew in March.

However, exports to Indonesia, the euro zone, the United States and Thailand declined.

Exports to Hong Kong expanded by 99.4 per cent due to semiconductor shipments, which soared 176 per cent, and non-monetary gold.

Singapore’s export growth to Taiwan was also driven by chips and specialised machinery.

Exports to China rose on the back of speciality chemicals, specialised machinery and semiconductors.

Conversely, exports to the US continued to shrink, by 2.7 per cent in March, although this was a smaller rate of decline than the 44.8 per cent fall in February.

DBS’ Mr Chua said analysts are still monitoring the risks to trade, as even the global AI and electronics cycle is not fully insulated from disruptions related to the Middle East conflict.

“Early signs of rising input cost pressures and longer delivery lead times linked to the Middle East conflict have emerged,” he said.

“Even if the Strait of Hormuz reopens soon amid de-escalation, it will take time for shipments from the Middle East to normalise and return to pre-war levels, given lingering security concerns, weak confidence and damaged infrastructure in the Gulf.”

The Maybank economists said supply disruptions have so far been concentrated in the chemicals sector, but rising plastic prices could impact production costs for many other industries.

A helium shortage could also threaten the semiconductor industry. Iran has struck helium production facilities in Qatar, which supplies one-third of the global supply.

Non-electronics domestic exports will continue to face lingering and lagged effects from US tariffs, DBS’ Mr Chua said, adding that exports to the US are still on the decline.

Singapore in February raised its 2026 growth forecast for key exports to 2 per cent to 4 per cent in response to what it saw then as an improved global economic outlook, especially for AI-related demand.

OCBC’s Ms Ling said she is still retaining her full-year growth forecast for exports, which is similar to the official forecast, although she noted that second-half NODX may fall if global demand shrinks.

“The recent ceasefire and ongoing US-Iran negotiations have led to some recovery in risk sentiment and hopes that global energy prices will stabilise, if not normalise, in the coming periods, although some uncertainties remain,” she said.