Untapped High-Growth Tech Sectors in Asia for 2025–2026: Strategic Opportunities in AI, Climate Tech, and Undervalued Innovation Hubs

Asia's tech landscape in 2025–2026 is undergoing a seismic shift, driven by breakthroughs in artificial intelligence (AI), climate technology, and deep tech. While global investors have long focused on Silicon Valley and European hubs, the region's undervalued innovation ecosystems are now offering unparalleled opportunities for strategic market expansion. From agentic AI to sustainable automation, the next wave of growth is being shaped by cities and sectors that combine youthful demographics, government support, and scalable infrastructure.

Agentic AI and Advanced Semiconductors: The New Frontiers

Agentic AI-systems capable of autonomous, multi-step decision-making-is emerging as a cornerstone of Asia's tech revolution. According to a McKinsey report, this subfield is accelerating automation in logistics, healthcare, and enterprise solutions, with startups like Neptune Robotics and LionsBot leveraging AI to optimize supply chains and human-centric workflows. Parallel to this, advanced semiconductors are gaining traction, particularly in Japan, South Korea, and China, where governments are investing heavily in domestic chip production to counter geopolitical risks - a trend the McKinsey report also highlights.

The semiconductor boom is not just about manufacturing; it's about redefining entire industries. For instance, AI-driven chip design is enabling faster deployment of edge computing solutions, a trend that is particularly resonant in Asia's manufacturing and automotive sectors, as noted by the McKinsey report.

Sustainability and Automation: A Dual-Track Growth Strategy

Asia's push for sustainability is reshaping its innovation agenda. Robotics and automation are being deployed to reduce carbon emissions, with startups like VNPAY in Vietnam and Zhipu AI in China pioneering AI-powered energy management systems, according to the NextGen Tech 30 report. Meanwhile, the region's super app ecosystems-led by WeChat, Grab, and MoMo-are integrating green tech features, from carbon footprint tracking to renewable energy trading, a trend the McKinsey report discusses.

Investors are increasingly pivoting to deep tech and hard tech, particularly in China and India, where science-led innovation is being rapidly scaled. A World Economic Forum analysis highlights that 65% of Asia-Pacific businesses now use AI regularly, with climate tech and automation accounting for 40% of new venture capital allocations.

Undervalued Innovation Hubs: The Next Battleground for Growth

While cities like Beijing and Bengaluru dominate headlines, Tier-2 and Tier-3 hubs are quietly becoming powerhouses of innovation. In Indonesia, Bandung's creative tech and gaming industry is attracting global attention, while Ho Chi Minh City's fintech sector-valued at $1.2 billion in 2023-has produced unicorns like VNPAY, as noted in 7 Emerging Tech Hubs. Similarly, Vietnam's internet economy is projected to reach $500 billion by 2030, driven by a young, tech-savvy population and government-backed initiatives referenced in the 7 Emerging Tech Hubs piece.

India's Tier-2 cities, such as Surat and Tenkasi, are emerging as centers for industrial automation and global software delivery, according to the NextGen Tech 30 report. These hubs offer cost advantages, skilled labor, and policy incentives that make them ideal for scaling deep tech ventures. For example, Singapore's $28 billion Research, Innovation, and Enterprise (RIE) 2025 plan has catalyzed biotech and biomedical advancements, attracting firms like Flagship Pioneering, as detailed in the NextGen Tech 30 report.

Strategic Advantages for Market Expansion

The strategic appeal of these hubs lies in their ability to combine affordability with scalability. In Jakarta, over 10,000 startups thrived in 2023, backed by $6 billion in venture capital inflows, according to the 7 Emerging Tech Hubs article. Meanwhile, Shenzhen's biotech ecosystem has doubled its billion-dollar exits in 2025, supported by strong government subsidies and a focus on AI-driven drug discovery - a trend the McKinsey report highlights.

Public-private partnerships are also critical. Thailand's "Startup Thailand" initiative has nurtured thousands of startups since 2016, while South Korea's risk-sharing programs are diversifying capital flows amid global uncertainties, as noted in the NextGen Tech 30 report. These ecosystems are not just local success stories-they are global innovation corridors, with startups like PhonePe and MoMo expanding their revenue streams beyond home markets, a dynamic covered in the NextGen Tech 30 report.

Conclusion: A Call to Action for Investors

Asia's 2025–2026 tech landscape is defined by two key themes: the rise of agentic AI and the democratization of innovation. For investors, the imperative is clear: target sectors and hubs that combine cutting-edge technology with scalable infrastructure. Whether it's investing in Jakarta's fintech unicorns, Bandung's gaming startups, or Shenzhen's biotech breakthroughs, the region's undervalued ecosystems offer a unique blend of risk-adjusted returns and long-term growth potential.

As the NextGen Tech 30 2025 report underscores, Asia's growth-stage companies are not just competing globally-they are redefining entire industries. For those willing to look beyond the obvious, the rewards are substantial.