AI hardware upcycle drives export forecast past 20%

AI-driven demand for electronics lifted exports by 36.2% in the first five months of 2026.

The Hong Kong Trade Development Council (HKTDC) has raised its 2026 export growth forecast to above 20%, citing stronger-than-expected shipments and sustained demand for technology products.

Hong Kong’s exports rose 36.2% YoY in the first five months of the year, driven mainly by the artificial intelligence (AI)-led electronics upcycle.

Electronics exports increased 44.3% during the period, with parts and components rising 50.8%. The sector accounts for more than 70% of Hong Kong’s total exports.

“The recent upturn has been supported by resilient regional trade amid the AI-driven technology cycle, which has been maintained despite lingering uncertainties in the Middle East,” said Bruce Pang, HKTDC Director of Research.

Pang said the outlook for many of Hong Kong’s major markets has improved, with the Chinese Mainland and ASEAN remaining the most promising.

Growth was recorded across several major markets in the first five months of the year. Exports to ASEAN climbed 47.8%, whilst shipments to the US, the Chinese Mainland, and Taiwan increased 46.8%, 39.1%, and 66.6%, respectively.

Sentiment towards the US market has also strengthened following the Xi-Trump meeting in mid-May and recent trade policy developments, Pang said.

“At present, export momentum is expected to remain solid, although geopolitical developments and risks to global demand may continue to create uncertainties,” he added.

Exporter sentiment improved in the second quarter, with HKTDC’s Current Performance Index rising to 51.0 and its Expectation Index reaching 52.4. Readings above 50 indicate expansion and improving confidence.

HKTDC said AI-related electronics demand is expected to support export performance in the near term, particularly through demand for high-performance chips, ICT equipment and related components.

However, part of the recent export growth was also price-driven. Tight semiconductor supply has pushed up component prices, particularly memory chips and advanced processors.

“The export value of key electronic components has risen faster than order volumes, with price increases amplifying overall growth,” said Wing Chu, HKTDC Deputy Director of Research.

Chu said semiconductor prices are expected to moderate as production capacity expands and supply constraints ease.

“This may lead to some softening in export value growth over the longer-term, even as underlying demand for AI-enabled devices and infrastructure remains resilient,” Chu said.

HKTDC also flagged Middle East tensions, energy-price volatility and uncertainty over US trade measures as key risks that could weaken global demand.