SINGAPORE (Aug 19): Micron Technology’s official opening of its expanded facility in Singapore comes right when the prospects of a technical recession has increased. For the city state, the price of hosting the US semiconductor giant is to widen the exposure of its economy to the volatility of this sector. When demand is strong, export figures enjoy a lift. The converse is happening now.

“Though there appears to be some signs of bottoming-out in recent months in semiconductor equipment billings, shipment growth in semiconductors globally has continued to slip,” warns DBS senior economist Irvin Seah in his Aug 14 note. “Further tariffs by the US on an additional US$300 billion of imports from China, as well as the ongoing trade dispute between Japan and [South] Korea, could derail any possible turnaround in the electronics cycle.”

“The outlook for the manufacturing sector remains bleak. Another quarter of disappointment, which is likely judging from the hostile external environment and weak global demand, would push the manufacturing sector into an outright recession.”

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