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Fitch Flags Trouble Ahead—APAC Tech Sector Outlook Turns ‘Deteriorating’ Amid Demand & Tariff Turmoil

Updated: June 10, 2025 09:15

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Fitch Ratings has downgraded its 2025 outlook for the AsiaPacific (APAC) technology sector from neutral to deteriorating, citing mounting risks from global tariff tensions and sluggish consumer demand. The region, a global hub for tech hardware manufacturing, is now facing a perfect storm of economic uncertainty, supply chain disruptions, and weakened discretionary spending.
 
Key Highlights:
  • Tariff Shockwaves: Broadbased US tariffs are expected to raise costs and disrupt supply chains, particularly impacting APAC’s hardware exports.
  • Demand Dip: Consumer tech demand is softening across key markets—US, EU, Japan, and UK—with projected spending growth below 1% in most regions.
  • China’s Slowdown: Even China’s consumer spending forecast has been revised down to 3.3%, from 4.3% in late 2024.
  • Semiconductor Split: While AIrelated chip demand remains strong, nonAI segments face sharp declines, especially in consumer electronics.
  • Company Impact: Firms like Renesas and LG Electronics are flagged as having limited rating headroom, making them more vulnerable to volatility.
  • Forrester’s Take: Separately, Forrester has trimmed its APAC tech spending forecast by 1–2%, citing tariffrelated uncertainty, though AI and cloud adoption remain bright spots.
Despite the headwinds, larger, diversified firms may weather the storm better. But for many, 2025 could be a year of tight margins, cautious spending, and strategic recalibration.
 
Sources: Fitch Ratings, Forrester, Daily FT.

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