Maybank: AI Demand Will Keep Driving Singapore's Semiconductor Growth

Maybank Investment Bank expects demand from artificial intelligence-related fields to remain a key growth driver for Singapore's semiconductor sector, according to a new research note released Monday. The global AI-in-semiconductor market is projected to balloon from US$56.4 billion in 2024 to over US$174.5 billion by 2032, representing a compound annual growth rate of 15.2 percent.

The research house noted that 2025 was a better year for most semiconductor players in Singapore, though the sector still fell short of market expectations. AI demand has been the primary growth driver, with enterprise AI adoption rates climbing sharply from 55 percent in 2023 to 78 percent in 2024. Capital expenditures into AI and cloud infrastructure are projected to reach around US$375 billion as hyperscalers race to build out capacity.

The analysis highlights a significant spillover effect: "AI Demand has also led to strong semi-con demand, which has flowed down to Singapore and Malaysia manufacturers," Maybank said in the note. "We are seeing ramp up of orders coming through for several companies." Demand in the memory space — particularly DRAM and High Bandwidth Memory — has been especially strong, with HBM facing supply constraints due to packaging and yield challenges. North America holds the largest share of the global AI market, with the United States alone accounting for a US$74 billion market in 2025.

Maybank cautioned that the massive infrastructure buildout carries risks. Major US hyperscalers are committing an estimated US$725 billion to data centres and AI hardware combined, creating what the research house described as a "mismatch between skyrocketing capital expenditures and realized AI revenue" — the defining challenge of the 2026 tech landscape. The industry is being forced to pivot from an "AI narrative" to an "AI proof" phase to justify the investment. Key downside risks include geopolitical tensions between the US and China, and further trade restrictions on the semiconductor segment that would likely dampen global demand.

Why it matters for Singapore: As a critical node in the global semiconductor supply chain, Singapore stands to benefit directly from sustained AI-driven demand. The island's manufacturers — including firms in the memory, packaging, and testing segments — are already seeing order ramp-ups flow through from hyperscaler investments. But the sector's reliance on stable US-China trade relations and uninterrupted global supply chains means Singapore's semiconductor upside is tied to geopolitical outcomes well beyond its control. Maybank's "AI proof" framing underscores that the window for capitalising on this boom may be narrower than the headline growth figures suggest.