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Is tech demand slumping, or just shifting?

Reuters/Jason Lee
Taiwanese exports seem to be losing a bit of air.
This article is more than 2 years old.

Just as the Apple Watch goes on sale this week, there are emerging signs of something of a slump in tech demand.

At least that’s how some are interpreting much-worse-than-expected export numbers released by Taiwan today. Year-over-year exports fell 8.9%, thanks to sharp drops in sales to China, Japan and Europe, where sales were down 8%, 12% and 14% respectively. Exports to the US were flat.

Much of the decline is due to slumping gasoline and petrochemical exports. But the weak shipments to China are worth taking note of, given Taiwan’s role in the tech supply chain.

Taiwan traditionally exports components to the mainland for the manufacture of the final technology goods that consumers actually buy. The expected March restocking demand for electronic components has apparently yet to materialize, and electronics exports were actually down slightly year-on-year.

But Taiwan’s slumping electronics numbers could also suggest that the links of that traditional supply chain are being rearranged. Huge Taiwanese electronic companies such as Hon Hai Precision and Wintek have made significant investments in manufacturing in cheaper countries in recent years—most notably Vietnam.

The impact of those investments can clearly be seen in Vietnam’s electronic exports, which surged last year. In November of 2014, Vietnam’s electronics exports more than doubled, while Taiwan’s grew at a much more muted 10%.

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