Measures to rein in China's economy could result in some short-term pain for the mainland's bustling electronics manufacturing sector and semiconductor market.
'Cooling the economy may slow down investments in factories and impact on the domestic consumption of electronic goods,' said Dorothy Lai, principal analyst at Gartner Hong Kong.
She said electronic components shortages could also put a damper on the larger Asian electronics manufacturing industry, in which factories along the Pearl River Delta region dominate production.
A number of large Hong Kong companies are also expected to be affected by the forced economic slowdown since local entrepreneurs have interests in many mainland electronics manufacturing enterprises. It is a situation that large foreign semiconductor suppliers must bear once more, a year after they experienced poor results because of the outbreak of Sars.
'With the Chinese government warning of an overheating economy, semiconductor manufacturers may not be able to get loans and funding as easily as before,' Ms Lai said.
In China, these vendors' chips go inside products that range from notebook computers, flat-panel displays and mobile phones to hard disk drives, DVD players and video game devices.
'The global semiconductor market saw 32 per cent revenue growth last year, as US$21.9 billion in billings came from China and Hong Kong,' Ms Lai said. 'After Sars, this market saw a recovery in the third and fourth quarters.'
