Attracting global capital, Asia's new "super cycle" is unfolding.

Investors are turning their attention to Asia, looking for the next breakthrough in the global stock market rally. Driven by the wave of artificial intelligence, the South Korean stock market has led the global rise this month, attracting a large influx of funds. The implied volatility in the options market has climbed to extreme levels, leading derivative strategists to recommend long structural positions. All these signals point to the same conclusion: the rally in Asia may just be beginning. According to the news from the Trading Desk, Morgan Stanley's Asia-Pacific team has emphasized recently that the underlying DRIVE of the Asian industrial cycle is shifting from traditional real estate and general manufacturing restocking to AI and its infrastructure, energy security and energy transition, defense and supply chain resilience investments. By 2030, total fixed investment in Asia is expected to reach $16 trillion. Morgan Stanley expects the scale of fixed asset investment in Asia to increase from approximately $11 trillion in 2025 to $16 trillion in 2030, with a nominal annual compound growth rate of about 7% between 2026 and 2030, significantly higher than in recent years. The underlying logic of the "super cycle": a significant acceleration in Asian capital spending The core of this Asian industrial cycle is fundamentally different, as AI has brought capital spending back to the forefront. In the past two years, discussions about AI in the market have focused more on models, applications, and the "Big Seven" stocks in the US. But from an Asian perspective, the true meaning of AI is the comprehensive expansion of chips, storage, servers, optical modules, data centers, power systems, and cloud infrastructure. Morgan Stanley mentioned that the proportion of global CIOs listing AI as a top priority task has risen to 39%. Correspondingly, global AI data center investments are expected to reach around $2.8 trillion between 2026 and 2028, with an annual growth rate of about 33%. Asia is at the center of the AI hardware supply chain: from Taiwan Semiconductor, Samsung, SK Hynix to Chinese mainland semiconductor, server, optical communication, and cloud infrastructure companies, all will benefit from this investment cycle. The report also predicts that capital spending by major chip companies is expected to increase from approximately $105 billion in 2025 to around $250 billion per year by 2028. This means that AI is a capital-intensive competition. China's role is particularly worth noting. Morgan Stanley believes that Chinese AI is a competition of complete system capabilities: computing power determines speed, cloud platform determines scale, token usage determines economic efficiency, and application scenarios determine value attribution. In the context of continuing external chip restrictions, the linkage of domestic AI chips, local cloud platforms, and large-scale model ecosystems is becoming a new main theme in Chinese tech investment. Their analysis shows that the Chinese AI chip market could reach $67 billion by 2030, with a domestic self-sufficiency rate of up to 86%. Whether this forecast will be fully realized remains to be seen, but the direction is clear: domestication of computing power has gradually shifted from a policy proposition to a commercial proposition. China's export story is expanding from "the new three" of electric vehicles to Siasun Robot & Automation In recent years, the most prominent sectors in China's export structure have been electric vehicles, lithium batteries, and photovoltaics. The report suggests that the next phase of China's manufacturing growth may come from Siasun Robot & Automation, particularly in industrial and humanoid robots. Morgan Stanley points out that China already accounts for about half of the global incremental demand for industrial robots. The annual global shipments of humanoid robots from China are expected to reach around 13,000 to 16,000 units by 2025, with about 90% coming from Chinese manufacturers. In contrast, markets like the US and Japan are still in the prototype or early verification stages. What's interesting is that the report draws a comparison between China's current exports of Siasun Robot & Automation and the state of electric vehicle exports around 2019: at that time, electric vehicle exports had not yet reached their explosive growth phase, but the supply chain, policy support, and manufacturing capacity were already in place. Today, the Siasun Robot & Automation industry exhibits similar characteristics - the market size may not be large yet, but the industry chain is expanding rapidly. In terms of data, Chinese exports related to humanoid robots and industrial robots had reached a rolling scale of about $1.5 billion in March 2026, similar to the level of Chinese electric vehicle exports in early 2020. In the following years, electric vehicle exports expanded rapidly, reaching approximately $70 billion in 2025, with a quarterly annualized run rate further increasing to around $86 billion. Of course, whether Siasun Robot & Automation can replicate the growth curve of electric vehicles remains to be seen, depending on cost reductions, opening up of application scenarios, and overseas regulatory environments. However, China's advantages in components, complete machine manufacturing, supply chain collaboration, and rapid iteration have already begun to show. Energy security and defense spending are providing the second and third growth poles The other side of the expansion of AI data centers is the enormous demand for electricity and energy infrastructure. The more intensive the computing power, the more important electricity, cooling, power grids, and energy storage become. Morgan Stanley believes that energy shocks will catalyze investments in energy security in Asia, and renewable energy still accounts for a small proportion of Asia's total energy consumption, indicating significant room for further investment. China has industrial advantages in sectors such as photovoltaics, electric vehicles, and lithium batteries, with exports in these areas reaching nearly $200 billion over a 12-month rolling period and benefiting significantly from this round of energy transition capital expenditure. At the same time, defense spending is also showing a structural rise in several economies in Asia. Japan, South Korea, and India have all seen an increase in defense spending as a percentage of GDP. China and South Korea are also among the top ten defense exporters in the world. For the capital markets, this means that demand for industries in the high-end manufacturing, materials, electronic components, and precision equipment chains may receive longer-term support. In other words, AI provides the demand for computing power, energy provides infrastructure constraints, and defense and supply chain security provide "resilient investments" in a geopolitical context. The combination of the three forms the foundation of the super cycle in Asia. Who will benefit the most? China, South Korea, and Japan stand at the core of the industrial chain From the perspective of regional benefits, Morgan Stanley specifically mentions China, South Korea, and Japan. Mainland China excels in the completeness of the industrial chain, manufacturing scale, engineering capabilities, and emerging export product categories like new energy and industrial robots. South Korea has advantages in storage, HBM, batteries, and some equipment materials; while Japan still has deep accumulation in semiconductors, materials, precision manufacturing, and industrial automation. The proportion of capital goods exports can also shed light on the issue. The report shows that approximately 38% of Thailand, 36% of China, 35% of Japan, and 30% of South Korea's exports are capital goods. This means that when the global economy enters a new cycle of equipment investment, the external demand elasticity of these economies will be more pronounced. Finally, from the structure of the capital markets, these markets have higher weightings in sectors like industry, technology hardware, and materials, making it easier for the macro capital expenditure cycle to reflect in stock market performance. This also means that the pricing logic of Asian markets may change in the coming years, with a focus on which companies in the capital expenditure chain have orders, technological barriers, and profit flexibility. Risks not to be overlooked: oversupply, profit margins, and geopolitical friction The narrative of the super cycle is attractive, but it does not mean that all industries and companies will benefit at the same time. First, the expansion of capital spending may bring temporary supply pressures. The shale gas industry has shown that economies of scale can quickly open up global markets, but it may also bring price competition and fluctuating profit margins. Industries like industrial robots, AI hardware, photovoltaics, and energy storage may face similar challenges in the future. Second, technological constraints and export controls remain variables. There is significant potential for domestication of AI chips in China, but there are still gaps in areas like advanced processes, HBM, EDA, equipment materials, etc. The report also mentions that Chinese chips still lag behind top US chips, but competitiveness can be improved through system optimization, advanced packaging, software adaptation, etc. Third, employment structures will also be affected by AI. In Morgan Stanley's "Future of Work" study, it is estimated that about 90% of jobs will be affected to varying degrees by AI automation and enhancement. In their sample companies, early adoption of AI has resulted in over 11% productivity gains, but also an average of about 4% net job reduction, with significant differences among countries and industries. For China, how to improve efficiency while promoting retraining and job transitions will be an important long-term policy and management issue. Fourth, market volatility may increase. The report also suggests that the divergence in market sentiments between bullish and bearish scenarios in regional markets means that investors' expectations regarding AI capital spending, export orders, and profit realization will continue to differ. This article is reposted from "Zhuifeng Exchange Platform"; GMTEight Editor: Huang Xiaodong.