A key Asia stock index has gained its biggest lift in earnings projections in more than three years, as the region's semiconductor firms benefit from the boom in generative artificial intelligence.

Also helped by robust second-quarter results across a wide range of industries, the average of 12-month earnings per share forecasts for companies in the MSCI Asia Pacific index climbed 3.9% over the past month, according to LSEG IBES data that collates analysts' estimates.

It was a particularly sharp jump after downward revisions and smaller increases for the first seven months of this year.

Projections for South Korean firms surged 8% while those for Taiwanese and Japanese companies rose 5%.

Samsung Electronics, for example, forecast strong AI-driven demand for chips this year after logging a more than 15-fold rise in second-quarter operating profit. Taiwan's TSMC, the world's largest contract chipmaker, has raised its full-year revenue forecast.

"The upgrades in Asian companies' earnings expectations are mainly due to upgrades in South Korea and Taiwan on the back of improving semiconductor earnings," said Minyue Liu, an equity investment specialist at BNP Paribas Asset Management.

The data also showed forward 12-month EPS forecasts for Chinese firms have been lifted 1.5% in the past month.

"Many investors are choosing to ignore China even though some companies' earnings have beaten market expectations," said Elizabeth Soon, head of Asia ex-Japan equities at PineBridge Investments.

"The ratio of misses to beats in earnings has narrowed and property market stabilization measures are a positive indicator of the government's support."

Although domestic demand in China remains weak, manufacturing profit growth showed mild improvement in July.

Elsewhere, earnings outlooks for Indonesian, Australian and Indian companies were on average lightly downgraded over the past month.

A Reuters analysis of constituents in the MSCI Asia Pacific index that have reported second-quarter earnings so far shows net profit on average jumping 29.2% from last year, the most growth in two years.

The MSCI Asia-Pacific index has risen 9.7% so far this year.

By sector, EPS projections for tech firms rose 7.5%, while those for the communication services and consumer discretionary sectors climbed 5% each. EPS forecasts for utilities, known for their high dividend payouts, were lifted some 20% with electricity demand expected to surge in regional economies like India. Forecasts for healthcare firms gained 8%.

Analysts predict U.S. Federal Reserve rate cuts will bolster earnings and boost Asian equities.

Mark Haefele, chief investment officer for global wealth management at UBS, said MSCI Asia ex-Japan has historically seen a median price return of around 10% in the 12 months following the first rate cut in the past six Fed easing cycles. Regional equities often outperform U.S. stocks when the dollar weakens by 5-10%, he noted.

"We see a similarly positive economic backdrop this time around, bolstered by healthy earnings growth. Around 60% of Asia ex-Japan companies have beaten expectations midway through the second quarter season," he said.

(Reporting by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru; Editing by Vidya Ranganathan and Edwina Gibbs)