Not surprisingly, the Taiwanese market is having trouble deciding which way its crucial electronics sector goes next. The signals are conflicting.
A usual indicator is the trend in United States computer-makers' new orders. The name on the outside of your PC may be American but look inside - it's Taiwanese.
Take the growth rate of US new orders, move it forward by 10 months and you would normally have a good match with the growth of Taiwan's electronics production . . . until the middle of last year.
At that time, US orders fell while Taiwan's electronics production continued to rise. The Taiwan market apparently read the US trend as the more important of the two and an electronics rally, which saw electronics shares outperform the rest of the market by more than 100 per cent since the beginning of last year, came to an abrupt halt.
If US orders are the critical indicator, a recovery is on its way. The orders are rising again. Although it might take a while to clear producers' inventories, this news has to be seen as good.
However, two other leading indicators say not all the news is good. The year-on-year growth rate of Taiwan's electronics orders on hand is slumping. On a six-month average basis, it was down to 11 per cent in March from 27 per cent last November.
This indicator again turns out to have a close correlation with the US Semiconductor Industry Association's tally of worldwide semiconductor sales.