South Korea's factory growth slowed to its weakest pace since February in October, with S&P Global's manufacturing purchasing managers' index falling to 51.3 from 53.9, as final surveys published Monday showed Asia's big chip exporters losing momentum while Southeast Asian producers picked up speed.

The split matters for investors who have bet on Asia's technology supply chain all year. Taiwan, Japan and South Korea, the region's main suppliers of chips and AI hardware, all reported slower growth in output and orders. Indonesia, Thailand, Malaysia and Vietnam improved. Every major economy in the S&P Global and HSBC surveys stayed above 50, the line that separates expansion from contraction.

Korea, Taiwan and Japan cool

Korean output growth slowed to a marginal pace, the weakest in 10 months, and new orders rose at the softest rate since June, S&P Global said. Some firms reported weaker automotive orders. Export order growth slowed sharply. Employment fell for the first time in four months, and companies cut stocks of raw materials at the fastest rate since April 2020, citing shortages and deliberate destocking.

Usamah Bhatti, an economist at S&P Global Market Intelligence, said the demand momentum carried over from the third quarter started to weaken as the final quarter began. Firms still expected a semiconductor upcycle to support sales next year, he added.

The slowdown in the survey comes days after customs data showed South Korea's October exports jumped 93.7% on chip shipments.

Taiwan's PMI fell to 54.9 from 56.7 in September, which had been its highest in more than five years. New order growth was the slowest since March. Firms added staff and bought extra inputs partly to build safety stocks against supply disruption and rising costs, according to the survey.

Japan's final PMI came in at 53.3, down from 54.1 and unchanged from the flash estimate published in late October. Output and new orders grew at the slowest rates in seven months. Input cost inflation picked up again on higher prices for oil, raw materials and components, and manufacturers built up stocks of purchases at the fastest rate in almost four years to get ahead of further increases.

Reuters, in its regional roundup, said the conflict in the Middle East has kept fuel and food prices high across Asia, weighing on consumption and business confidence. Toru Nishihama, chief emerging market economist at Dai-ichi Life Research Institute, told the agency that strong chip and AI demand had masked weak spots in Asian and global economies, and that this was becoming harder to sustain.

China steady as prices fall

The RatingDog China General Manufacturing PMI, compiled by S&P Global, was 52.0 in October, little changed from 52.1 and above 50 for an 11th straight month. Output rose at the fastest pace since April, helped by stronger domestic and foreign orders.

Prices tell a different story. Factory gate charges fell again as firms cited intense competition, and export prices declined for the first time in nearly a year, RatingDog said. Business confidence eased from September.

The private survey contrasts with official data released Saturday that showed factory activity shrinking for the third time in four months, according to Reuters.

Southeast Asia and India pick up the slack

Indonesia stood out. Its PMI rose to 54.0 from 52.4, the strongest improvement in operating conditions since March 2024, according to S&P Global. Production grew at the fastest rate since March 2024, new orders rose at the steepest pace in five years and new export orders grew at a record rate for a series that began in April 2011. Input costs rose faster, and manufacturers lifted their selling prices more quickly in response.

Thailand's index climbed to 54.8 from 54.3, its fastest expansion this year, driven by the sharpest rise in new orders since December 2025. Output prices were broadly stable as cost inflation stayed muted.

Malaysia returned to growth at 51.0 after a reading of 49.9 in September, as foreign demand improved. Business confidence, however, slid to a six-month low, and both input costs and selling prices rose faster on higher transport and material costs.

Vietnam's PMI edged up to 52.3 from 51.9, extending growth to 16 months. Output and new orders rose more slowly, though, and input prices climbed at the fastest rate since June on oil, fuel and transport costs, while suppliers' delivery times lengthened.

India remained the strongest of the large economies. The HSBC India Manufacturing PMI eased to 54.7 from 55.1 but stayed above its long-run average. New export orders grew at the fastest pace in six months, and input cost inflation fell to its lowest since February, according to the survey. Selling price inflation was close to a four-year low. Pranjul Bhandari, chief India economist at HSBC, said producers built input stocks to the greatest extent in eight months as a buffer against shortages.

For central banks, the price readings may count as much as the headline indexes. Cost pressures eased in India, Taiwan and China but quickened in Japan, Indonesia, Malaysia and Vietnam. Korea's manufacturers, the first to show a sharp loss of momentum, are already shedding workers.