IDC reports 5.4% growth in regional ICT spending, driven by hardware demand and a shift towards industrial-scale AI execution in key sectors.
According to the International Data Corporation (IDC) Worldwide ICT Spending Guide, ICT expenditure across Asia-Pacific excluding Japan and China is forecast to reach US$647 billion in 2026. The market is projected to surpass $758 billion by 2029, with a forecast growth rate of 5.4% in 2026.
Software is expected to account for 24% of regional spending in 2026. Investment priorities in this category have shifted towards data sovereignty, security resilience, and enterprise resource management (ERM) applications. These tools are being utilised to provide the data architecture required for generative AI models.
Services represent another significant pillar, capturing over 23% of the ICT budget. This is driven by a requirement for technology outsourcing and professional assessments of legacy infrastructure.
Hardware remains the largest technology group, representing more than 52% of total spend, and is the fastest-growing segment at 3.6% year-on-year. This growth is linked to manufacturing shifts towards India, Vietnam, and Thailand, which have increased demand for non-x86 servers, edge computing nodes, and AI-centric infrastructure.
The banking, software and information services, and central government sectors are expected to be the primary contributors to this spending, with a combined total exceeding $104 billion.
Mario Allen Clement, research manager, IDC, said: “We see a massive reallocation of capital away from ‘pilot projects’ and toward the unglamorous foundation — cleaning up toxic data, securing borders, and hiring the services talent that can actually make the machines work. If you haven’t fixed your data architecture by the end of 2026, you won’t survive the 2029 automation wave.”
Geopolitical factors and supply chain realignments are cited as primary catalysts for these trends. India’s growth is influenced by its Digital Public Infrastructure (DPI), while ASEAN nations are focusing on data residency compliance.
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