BEIJING, October 01, 2026 (DAILYNWZ) — Factory activity across much of Asia expanded in September, helped by strong demand for semiconductors and artificial intelligence-related goods, although rising energy costs and uneven domestic demand kept the outlook fragile, private surveys showed.
The improvement was led by China, Korea, Taiwan and Japan, while China’s manufacturing sector also returned to growth after two months of contraction. The broader pickup offers some relief to policymakers as higher energy prices add to inflationary pressure linked to the U.S.-Israeli war with Iran.
Korea posted the strongest improvement among the major Asian exporters. Its manufacturing PMI, compiled by S&P Global, climbed to 53.9 in September from 52.3 in August, reaching its highest level since May and remaining above 50 for a 10th consecutive month.
Export demand accelerated at its fastest pace in 15-1/2 years. New orders and production also recorded their strongest growth in about five-and-a-half years, with companies pointing to the combined strength of the semiconductor and automotive industries, said Usamah Bhatti, an economist at S&P Global Market Intelligence.
Taiwan, another major beneficiary of the global AI boom, saw its manufacturing PMI rise to 56.7 from 54.7 in August, pointing to a stronger expansion as demand for chips and AI-related products remained firm.
Japan’s factory sector continued to grow, but at a slower pace. Its S&P Global PMI fell to 54.1 from 54.9, marking the weakest expansion in six months as output and new orders lost momentum.
Still, external demand remained resilient. Japanese manufacturers recorded a ninth consecutive monthly increase in new export orders, supported by solid demand across Asia and improving sales to the United States.
That strength came with a cost. Japanese companies continued to raise selling prices at one of their sharpest rates since late 2022, the PMI survey showed, highlighting persistent pressure from elevated input costs.
In China, the manufacturing purchasing managers’ index rose to 50.1 in September from 49.8 in August, moving back above the 50 mark that separates expansion from contraction. The rebound reflected a recovery in production, while weak domestic demand continued to weigh on businesses, according to the National Bureau of Statistics.
The picture elsewhere in Asia was less uniform. Manufacturing activity expanded in Indonesia and Vietnam but contracted in the Philippines and Malaysia, according to the surveys.
The regional figures underline the growing importance of the global technology cycle for Asian factories, even as higher energy costs and softer domestic demand leave the recovery uneven.