Asian tech firms from chipmaker Samsung to display panel maker LG Display warned of a sharp slowdown in demand for smartphones, TVs and gadgets as surging inflation and deepening concerns of a recession crimp consumer spending.
While demand from server or data centre customers is less affected by macroeconomic issues, server clients would also have to adjust their inventory if a recession occurs, the South Korean firm cautioned. "Recently, consumer sentiment has been rapidly shrinking due to deepening concerns over inflation and economic recession, and companies are now noticeably moving to cut costs," it said.
Panasonic Holdings Corp posted a 39 per cent plunge in June quarter profit and said the risk of an economic slowdown caused by geopolitical risks and inflation globally remains high. The Japanese conglomerate said profits at its energy unit that supplies EV batteries to Tesla Inc fell mainly due to higher costs for raw materials and logistics.U.S.
Tech and auto firms with factories in China have faced business disruptions in the world's second-largest economy due to COVID-19 lockdowns even as the war in Ukraine has pushed up energy and logistics costs. Toyota Motor Corp, the world's largest automaker by sales, has seen its output hit in recent months by the chips shortage and supply constraints in China, producing 9.8 per cent fewer cars over April-June than it initially planned.