AI chip demand drives Asian airlines’ cargo revenue to three-year highs

Asian airlines are riding a wave of artificial intelligence-driven cargo demand, with carriers across the region reporting their strongest freight revenue in more than three years as the global race to build out AI infrastructure accelerates.

Semiconductor Shipments Fill Cargo Bays

The latest quarterly results from Korean Air Lines, China Airlines, and EVA Airways show cargo revenue at levels not seen since the pandemic-era freight boom of 2022, according to Bloomberg News calculations of their financial statements. Korean Air posted operating income that topped analyst estimates more than fourfold earlier this week, crediting global AI investments for sending cargo revenue soaring nearly 50 percent.straitstimes

EVA Air said AI server-related goods now account for 40 to 50 percent of the airline's total air freight from Taiwan to the United States. The carrier is adding three cargo aircraft by 2028 to meet demand. Cargo rates on major lanes from Hong Kong, Seoul, and Taiwan to the US have risen to their highest since 2022, according to TAC Index data.straitstimes

"Cargo has been the key bright spot for Asia-Pacific airlines," Nathan Gee, head of Asia-Pacific transportation research at Bank of America ↗ 1.29%, said. "We are bullish on the outlook for air cargo fundamentals into 2027," he added, pointing to "the recent birth of an AI supercycle" and tighter supply "supporting strong pricing power".straitstimes

TSMC Results Underline Demand Strength

The cargo boom's durability was reinforced on Thursday when Taiwan Semiconductor Manufacturing Company ↘ 2.19% reported second-quarter revenue of $40.2 billion, up more than 34 percent year-on-year, beating estimates. The chipmaker simultaneously announced an additional $100 billion investment in Arizona, bringing its total US commitment to $265 billion.finance.yahoo+3

TSMC has forecast the global semiconductor market will surpass $1.5 trillion by 2030, with AI and high-performance computing accounting for roughly 55 percent of that total. Demand for AI accelerator wafers alone is projected to increase 11-fold between 2022 and 2026.design-reuse+1

Cargo Crowding Out Other Goods

The AI freight surge is reshaping Asian air cargo markets. China Southern Airlines ordered up to 10 Boeing The Boeing Company ↗ 1.13% 777 freighters in June, while Cathay Pacific Airways expanded its Airbus A350F commitment to eight planes. AI-related cargo has begun to crowd out shipments of other goods from the Asia-Pacific, according to Bank of America, allowing airline cargo operations to fully recover higher jet fuel costs even as passenger businesses have not.straitstimes

Global air freight spot rates were up 38 percent year-on-year in June, according to Xeneta, while Dimerco's July Asia-Pacific freight report noted capacity remains tight on corridors serving Thailand, Malaysia, Taiwan, and South Korea.aircargoweek+1