Inflation rotates: oil to chips?: What the latest manufacturing PMIs mean for Asia

Research evidence excerpt

Inflation rotates: oil to chips?: What the latest manufacturing PMIs mean for Asia

2 July 2026

Inflation rotates: oil to chips? Economics

What the latest manufacturing PMIs mean for Asia Asia

◆ June PMIs show some improvement in delivery times, but broader supply Ines Lam

tightness and lingering bottlenecks may take time to normalise Economist, Asia The Hongkong and Shanghai

Banking Corporation Limited

◆ Taiwan and Japan continue to benefit from strong AI momentum; domestic ines.y.k.lam@hsbc.com.hk

orders help offset weakness in export orders in Korea and ASEAN +852 22887131

Frederic Neumann

◆ Input price pressure has eased, but Taiwan and Korea’s output prices suggest Chief Asia Economist, Co-head

Global Research Asia

chip inflation could increasingly take over from energy as the next inflation driver The Hongkong and Shanghai

fredericneumann@hsbc.com.hk

Oil prices have fallen to around pre-war levels since the 17 June US–Iran MoU. June manufacturing PMIs also +852 2822 4556

point to some easing in supply disruptions. However, the World Trade Organization’s Strait of Hormuz Trade Abanti Bhaumik

Associate

Tracker indicates that maritime traffic is still highly constrained, and shipping confidence has not fully normalised Bangalore

(29 June 2026). Any improvement remains uneven among cargo types: agricultural shipments are edging higher

and crude oil flows have only restarted slightly from very low levels, while LNG and fertiliser-related shipments

remain largely at a standstill.

June PMI prints show Japan as the clear, and unusual, regional outperformer (Heatmap 1). Its PMI surged to

54.8, the strongest reading since 2022, underpinned by solid demand tied to AI and semiconductors. Taiwan and