FedEx study sees Asia Pacific semiconductor expansion

FedEx has published a report on semiconductor and digital infrastructure supply chains in Asia Pacific. The study found that 35% of surveyed semiconductor companies expect to expand manufacturing into additional markets across the region.

Produced with Frost & Sullivan, the report examines how demand from artificial intelligence, high-performance computing, electric vehicles and advanced communications technology is reshaping semiconductor production and logistics in Asia Pacific. The region accounts for about 58% of global semiconductor industry revenue, it said.

Survey data points to continued regional expansion. Another 25% of respondents said they plan to increase or diversify sourcing within Asia Pacific or globally over the next three years, while 30% identified geopolitical disruption as the biggest challenge to growth.

FedEx surveyed 478 semiconductor industry participants from companies, industry associations and research institutes in Asia Pacific, Europe and North America. Responses were collected in Taipei and covered growth expectations, supply chain strategy, expansion challenges and logistics needs.

AI demand

The findings place artificial intelligence and high-performance computing at the centre of semiconductor demand growth. The report also highlights continued demand from electric vehicles, 5G, the internet of things, consumer electronics, medical devices and industrial automation.

Beyond chips, the study examines the equipment needed to support the AI economy, including servers, networking equipment, cooling systems and power solutions. These products often pass through several manufacturing, assembly and testing hubs before deployment, adding complexity to cross-border supply chains.

That complexity is shaping logistics choices. According to the survey, 44% of respondents said faster international shipping would be the most important factor when choosing logistics and supply chain partners over the next three years.

Regional roles

The report describes Asia Pacific as a network of specialised semiconductor hubs rather than a single manufacturing centre. It identifies China as a major materials supplier, consumer market and growing fabrication base, while Taiwan is described as the leading market for advanced semiconductor manufacturing and as accounting for roughly 60% of global foundry output.

South Korea is identified as a leading producer of memory chips and advanced fabrication, while Japan is highlighted for equipment, materials and specialist manufacturing inputs. Southeast Asia, meanwhile, is presented as an important base for assembly, packaging and testing operations.

As a result, design, fabrication, packaging, testing and deployment often take place across multiple countries before a finished product reaches the market. The report says this structure is creating a more interconnected supply chain as companies work to meet rising demand across industries.

Resilience focus

The survey suggests companies are putting greater emphasis on resilience alongside efficiency. Geopolitical uncertainty, regulation and customs complexity are among the pressures affecting operations, pushing businesses to diversify manufacturing locations and suppliers.

According to the findings, traditional just-in-time models are being supplemented by inventory buffers and broader sourcing strategies. That shift has increased the importance of logistics networks that can handle time-sensitive, high-value shipments across multiple jurisdictions.

Nearly four in five respondents identified Taiwan, Southeast Asia, Greater China and Japan as the markets expected to record the largest increase in semiconductor demand over the next three years. The report said this outlook reflects both the strength of established production hubs and the broader regionalisation of supply chains.

FedEx linked the findings to recent changes in its own network, including daily direct flights between Taiwan and South Korea and the expansion of its Taoyuan transhipment centre in Taiwan. It said the changes were intended to handle rising volumes of semiconductor and advanced technology shipments across the region.

"The next decade of innovation will be shaped not only by advances in semiconductors, but by the strength and resilience of the supply chains that power AI and digital infrastructure," said Salil Chari, President, Asia Pacific, FedEx.

"As investment in AI infrastructure accelerates, businesses are managing increasingly complex supply chains spanning semiconductors, servers, networking equipment, cooling systems and advanced technology components across multiple markets. Resilience, visibility and agility have become strategic advantages. FedEx is helping customers connect these critical supply chains through our extensive APAC network, global reach and specialized logistics capabilities, enabling innovation to move faster from factory floor to data center," said Chari.