Strong US spending on artificial intelligence hardware is supporting currencies in parts of East and Southeast Asia. According to a new Goldman Sachs analysis, the currencies of South Korea, Taiwan and Malaysia — all exporters of chips or components used in AI systems — have outperformed those of economies less exposed to US tech-sector spending.
The channel identified by Goldman Sachs is straightforward: manufacturers exporting chips and other AI-related components bring US dollar revenues back home and convert a share of those dollars into local currency. Those dollar conversions have bolstered domestic currencies and helped cushion these economies somewhat from inflation dynamics that have weighed on other Asian countries.
At the same time, regional shocks are in play. The war involving Iran has disrupted fuel imports, and Asia’s refined fuel imports fell to a new low in August.
Trade data released on Tuesday further illustrate the trend: South Korea’s exports in August rose roughly 70% year-on-year, driven largely by a surge in demand for memory chips.
In sum, Goldman Sachs finds that US demand tied to the AI buildout is producing tangible currency inflows for chip-exporting economies in the region, offering some protection against inflationary pressures even as energy-supply disruptions remain a headwind.
