Fitch Downgrades APAC Tech Sector Outlook To 'Deteriorating'
Fitch Ratings has revised its 2025 outlook for the Asia-Pacific (APAC) technology sector from 'neutral' to 'deteriorating', signaling increased downside risks primarily driven by the escalating global tariff environment. The ratings agency warns that tariffs are expected to directly hurt demand for hardware and trigger wider economic slowdowns due to reduced consumer confidence and spending globally.
According to Fitch, the APAC tech sector is particularly vulnerable given its central role as the world's primary assembly hub for technology hardware and the dominant manufacturer of critical component parts across the supply chain.
Consumer technology hardware, often a discretionary purchase, is highly susceptible to shifts in consumer confidence and spending habits. Fitch anticipates the United States will present a challenging market for consumer technology products this year, following its earlier revision of the US retail and consumer products sectors' outlooks to 'deteriorating' in April 2025. While some companies exposed to discretionary categories have already faced negative rating actions, most Fitch-rated US retailers and consumer product companies are believed to possess sufficient rating headroom to withstand current volatility.
Beyond the US, APAC technology hardware businesses are also facing tough conditions in other major markets. Fitch forecasts weak consumer spending growth in 2025 for the eurozone (1%), Japan (0.7%), and the UK (0.9%). Although China's consumer spending growth forecast for 2025 remains relatively robust at 3.3%, this is still a downward revision from the 4.3% projected in December 2024.
Within Fitch's rated portfolio, APAC technology hardware companies are generally expected to fare better than their non-rated peers due to their larger size, greater diversification, and enhanced financial flexibility. However, Renesas (BBB/Stable) and LG Electronics (BBB/Stable) have been identified as having the lowest rating headroom within this group.
Divergent Trends Within Semiconductors and Internet Segments:
The outlook for different segments within the APAC semiconductor sector continues to diverge. Fitch anticipates strong demand related to Artificial Intelligence (AI) will persist, but warns that non-AI demand will be weak, particularly due to the likely tariff-related fall-off in demand for consumer electronics. The semiconductor industry also faces ongoing supply chain challenges that could impact production timelines and cost structures throughout 2025.
For the Chinese internet sub-segment, Fitch maintains a 'neutral' outlook for 2025. The agency expects major internet companies' strong business profiles, robust margins, and substantial net cash positions to support their credit profiles. However, their performance may diverge further due to an uneven impact from weak consumer spending, intense competition, and the increased deployment of AI across internet services.
Lastly, the outlook for the Indian IT services sub-segment remains 'neutral'. While revenue growth is expected to be affected by the slowdown in global economic growth driven by tariff uncertainty and more cautious customer spending on external IT services, Fitch still forecasts positive revenue and EBITDA growth for the segment. Related
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Malay Mail
33 minutes ago
- Malay Mail
Aspire Becomes First Fintech to Integrate Directly with Payboy, Streamlining Payroll Management
SINGAPORE - Media OutReach Newswire - 10 June 2025 - Aspire , the all-in-one financial operating system for modern businesses, today announced its integration with Payboy , one of Asia's leading payroll software providers, serving over 70,000 users across the region. This integration marks Aspire as the first fintech company to directly integrate with Payboy, streamlining payroll operations for growing management is traditionally a cumbersome process. Businesses often spend valuable hours manually reformatting payroll files for bank transfers, increasing the risk of errors and operational disruptions. In fact, 52% of Singaporean HR professionals report spending up to 6 hours per week troubleshooting payroll errors, revising records, or querying data , time that could otherwise be directed towards strategic business growth and new integration directly addresses these challenges by enabling a seamless export of payroll data. Businesses can effortlessly export payroll files from Payboy and import them directly into Aspire without any additional manual reformatting. This streamlined process drastically reduces error rates and administrative workload, enabling payroll to be executed efficiently in just two simple steps: export and upload.'We are proud to be the first fintech to integrate with Payboy,' said Andrea Baronchelli, CEO and Co-Founder of Aspire. 'Aspire is leading the way in simplifying financial operations. We're not just offering faster payroll, we're redefining what modern, automated finance should look like for ambitious businesses.''This collaboration represents a shared vision of what business tools should be: intuitive, compliant, and built for growth,' said Raphael Ng, General Manager of Payboy. 'Together with Aspire, we're helping teams move faster with confidence, and enabling data driven decisions.'The partnership supports Aspire's broader vision of streamlining business finance through seamless integrations with trusted tools. The Payboy integration expands Aspire's suite of payroll integrations, reinforcing its commitment to automating and simplifying financial operations for Singaporean entrepreneurs and integration is now live and available to Aspire users in Singapore, create an account at The issuer is solely responsible for the content of this announcement. Aspire Aspire is the all-in-one finance platform for modern businesses globally, helping over 50,000 companies save time and money with international payments, treasury, expense, payable, and receivable management solutions - accessible via a single, user-friendly account. Headquartered in Singapore, Aspire has 600+ employees across nine countries, clients in 30+ markets and is backed by global top tier VCs, including Sequoia, Lightspeed, Y-Combinator, Tencent and Paypal. In 2023, Aspire closed an oversubscribed US$100M Series C round and announced that it has achieved profitability.
Malay Mail
33 minutes ago
- Malay Mail
Asian Packaging Industry Online Exhibition 2025: Exploring Packaging Equipment and Products, Shaping the Future of Industry Development
TAIPEI, TAIWAN - Media OutReach Newswire – 10 June 2025 - The Asian Packaging Industry Online Exhibition 2025 (APACK 2025) runs from June 10, 2025, to October 10, 2025, offering international buyers a valuable opportunity to explore leading packaging manufacturers from across Asia in one place, without the limitations of geography or time. This four-month hybrid exhibition, co-organized by AsianNet and TradeAsia ( ), is tailored to meet the growing needs of global buyers seeking reliable suppliers, advanced technologies, and efficient sourcing solutions throughout the Asian its successful debut in 2022, APACK has consistently delivered outstanding results for both buyers and exhibitors. In 2025, the exhibition expands its reach with a four-month duration, strategically aligned with major global packaging industry events such as EXPO PACK Guadalajara 2025, ProPak China 2025, the Taipei International Packaging Industry Show, PACK EXPO 2025, and JAPAN PACK. This coordinated timing enables buyers to explore and compare solutions from multiple regions within a single procurement cycle, enhancing both sourcing efficiency and market 2025 features a robust lineup of respected Taiwanese manufacturers, including industry leaders such as KELJEN ENTERPRISE ALLEN INDUSTRIES and many more. These companies will present thousands of the latest packaging industry products and technologies, covering a wide array of sectors crucial to modern manufacturing and experience a comprehensive showcase of advanced Packaging Equipment & Machinery, including solutions for Food & Beverage Processing Machinery, Pharmaceutical Packaging Machinery, Paper Processing Machinery and Plastic Processing Machinery. The exhibition also features a wide variety of General Industrial Packaging Equipment, Packaging Applications & Solutions, as well as an extensive selection of Packaging Products, Plastic Packaging, Packaging Materials. In addition, the event highlights cutting-edge technologies in fields such as PU, PVC & Foam Products, Printing Machinery, Logistics & Supply Chain Solutions. Sustainability remains a key focus, with dedicated areas exploring Recycling & Waste Management Technologies and Environmental Protection & Sustainability Solutions, along with environmental protection and sustainability solutions. With thousands of the latest products, accessories, and equipment on display, the exhibition presents a highly professional and in-depth view of the industry. Attendees gain valuable insights into the newest innovations and developments shaping the global packaging the Online Exhibition:In response to the evolving landscape of global trade, APACK 2025 offers a comprehensive range of virtual solutions that simplify participation for buyers around the world. Through dedicated exhibitor pages, digital catalogs, and virtual booths, all fully integrated with the TradeAsia platform, buyers browse products and send inquiries in real time. This approach eliminates traditional barriers such as travel restrictions and significantly streamlines the process of discovering suppliers and making purchasing its founding in 1997, TradeAsia ( ) operates as a trusted B2B trade platform that connects millions of global buyers with more than 600,000 verified suppliers. With a comprehensive product database and close cooperation with international trade organizations, TradeAsia supports sourcing professionals in exploring product options, comparing suppliers, and expanding their global purchasing networks with efficiency and 2025 is more than an exhibition; it serves as a dynamic sourcing ecosystem designed for global buyers seeking to connect with Asia's leading suppliers and stay competitive in the packaging industry. It offers the opportunity to explore, inquire, and source from thousands of products, all from the convenience of a #TradeAsia The issuer is solely responsible for the content of this announcement.
Free Malaysia Today
39 minutes ago
- Free Malaysia Today
Price wars grip China as deflation deepens, US$30 for a luxury Coach bag?
Consumer price sensitivities have accelerated growth in the Chinese second-hand luxury market since the pandemic. (EPA Images pic) BEIJING : Chinese energy sector worker Mandy Li likes to treat herself to a luxury brand handbag once in a while. However, since her state-owned employer cut her wage by 10% and the properties her family owns lost half their value, she only buys second-hand ones. 'I'm cutting down on large expenditures,' said 28-year-old Li, while browsing for items in Beijing's Super Zhuanzhuan second-hand luxury items store that opened in May. 'The economy is definitely in a downturn,' she said, adding 'My family's wealth has shrunk by a lot' due to the property crisis China has been grappling with since 2021. As deflationary pressures mount in the world's second-largest economy, consumer behaviour is changing in ways that could lead to further downward pressure on prices, raising concerns that deflation could become entrenched, posing more headaches for China's policymakers. Yesterday's data showed that consumer prices fell 0.1% in May from a year earlier, with price wars raging in a number of sectors, from autos to e-commerce to coffee, amid concerns about oversupply and sluggish household demand. 'We still think persistent overcapacity will keep China in deflation both this year and next,' Capital Economics said in a research note. New businesses are seeking success by targeting penny-pinchers, from restaurants selling ¥3 (US$0.40) breakfast menus to supermarkets offering flash sales four times a day. However, this trend is worrying economists who see price wars as ultimately unsustainable as losing firms may have to close and people may lose their jobs, fuelling further deflation. Consumer price sensitivities have accelerated growth in the Chinese second-hand luxury market since the pandemic, with annual growth rates surpassing 20% in 2023, according to an industry report by Zhiyan Consulting from last year. However, that growth has also led to a spike in the volumes of such items available for sale – which is noticeable in the level of discounts on offer. Some new stores, including Super Zhuanzhuan, are offering items at discounts of up to 90% of their original price, compared with industry standards of 30%-40% in recent years. Discounts of 70% or more are also now common on large second-hand platforms, such as Xianyu, Feiyu, Ponhu and Plum. 'In the current economic environment we are seeing more existing luxury consumers shifting to the second-hand market,' said Lisa Zhang, an expert with Daxue Consulting, a market research and strategy firm focusing on China. However, sellers 'have more discounts and it's due to more competition'. At Super Zhuanzhuan, a green, carryall Christie handbag model by Coach, which its first owner bought for ¥3,260 (US$454) can be re-purchased for ¥219 (US$30). A ¥2,200 Givenchy G Cube necklace can be found for ¥187. 'Year-to-year, it's like 20% growth in the number of sellers, but the buyers' numbers are pretty much stable,' said the founder of another second-hand luxury business in China, asking for anonymity to speak candidly about the state of the industry. 'The middle class – their salary has really decreased. The economy is the number one reason we're seeing these trends,' he said. He said big cities such as Shanghai and Beijing have enough buyers to accommodate new market entrants, but elsewhere in China there isn't any room for more. 'I would expect the majority of the stores which have recently opened up will actually close,' he said. University professor Riley Chang was browsing through Super Zhuanzhuan not because she wanted to buy anything new – she hasn't spent money on big brands since the pandemic – but because she wanted to see what the market was if she sold any of her own possessions. She wasn't happy with what she saw. 'I've been to several major second-hand luxury stores in Beijing and Shanghai and they all try to push your price as low as possible,' said Chang.
