“JP Morgan”: Asia’s tech sector recovers on chip boom amid uncertainty about global economy

Although we are not seeing a broader recovery in many sectors, the technology sector is recovering, JP Morgan said. Asia performed reasonably well in the second half of last year. “Chinese industry has benefited, and North Asia has clearly benefited more,” Bruce Kasman, chief economist at JP Morgan, said in a press conference on Tuesday.

The bank official continued that the recovery is not uniform in all technology components, and described the semiconductor industry as the bright spot amid the artificial intelligence boom. The technology sector in the Asia-Pacific region has been growing on the back of the semiconductor boom, even as other industries struggle amid global uncertainty.

The technology sector, which boomed during the Covid-19 pandemic as companies accelerated digital transformation efforts, experienced a slowdown in 2022 and 2023 as rising inflation and interest rates dampened consumer spending, hurt demand for products and led to layoffs.

Deloitte said in a report on technology industry forecasts for 2024 that global spending on technology weakened in 2023 while layoffs rose. Deloitte considered: “There is currently a glimmer of hope that the return of technology may be imminent: economists have lowered their assessments of recession risks, and analysts are optimistic that the technology sector could return to modest growth in 2024.” The recovery in technology is important as other industries are still struggling. For his part, Ong Sin Peng, head of emerging market economics research in Asia at JPMorgan, said: “Although we have seen a recovery in technology, we are not seeing a broader recovery in non-technology sectors.” The AI boom continues to boost chipmakers and drive technology growth.