Global spending on information technology (IT) is forecast to grow 2.1 percent to US$3.75 trillion this year, after experiencing flat growth last year, market researcher Gartner Inc said yesterday.
However, the growth forecast is lower than the researcher’s previous estimate of 3.2 percent growth, despite an expectation that an upturn in the global economy should prompt companies to spend more.
Gartner attributed the slower projection for this year to a reduction in growth expectations for devices, data center systems and, to some extent, IT services.
“Price pressure based on increased competition, lack of product differentiation and the increased availability of viable alternative solutions has had a dampening effect on the short term IT spending outlook,” Gartner managing vice president Richard Gordon said in an e-mailed statement.
However, Gordon said he expects a return to “normal” spending growth levels from next year through 2018, saying that pricing and purchasing styles will reach a “new equilibrium.”
“IT is entering its third phase of development, moving from a focus on technology and processes in the past to a focus in the future on new business models enabled by digitalization,” he added.
Last year, the market registered flat growth, with IT spending worldwide totaling US$3.67 billion, according to the researcher’s tallies.
For this year, Gartner said all major segments in the IT field, from computing hardware to telecom services, are expected to grow by between 0.4 percent and 6.9 percent annually, amid recovering market sentiment and more credit available to companies.
Among the five major segments, spending on enterprise software is expected to continue seeing the strongest growth, rising 6.9 percent to US$321 billion this year from US$300 billion last year, Gartner said. Spending on devices — including PCs, ultramobiles, mobile phones and tablets — will grow 1.2 percent to US$685 billion this year, after expanding 1.1 percent last year.
Spending on IT services, data center systems and telecom services will grow this year by an annual 3.8 percent, 0.4 percent and 0.7 percent respectively, compared with a flat to minor contraction registered last year, Gartner forecast.
The report showed that IT spending in the Asia-Pacific region will reach US$746 billion this year, up 3 percent from last year, led by a 11 percent increase in Malaysia and a 6.8 percent expansion in India.
In Taiwan, total IT spending is likely to grow by 3 percent to NT$645.6 billion (US$21.57 billion) this year, Gartner forecast.
POOR INTERNAL CONTROLS: Insurance Bureau Director-General Shih Chiung-hwa said the company is expected to get back on track while its chairman is suspended The Financial Supervisory Commission (FSC) yesterday fined Shin Kong Life Insurance Co (新光人壽) NT$27.6 million (US$939,415) for a reckless investment that endangered its solvency, and suspended its chairman Eugene Wu (吳東進) for poor supervision. The penalty is the second-highest in a single case after Nan Shan Life Insurance Co (南山人壽) was fined NT$30 million in September last year and its chairman Du Ying-tzyong (杜英宗) suspended for two years, the commission said. In three rounds of special and regular examinations conducted since last year, the commission found that Shin Kong Life had given too much power to an asset and liability management committee
HEAVY INVESTMENT: Moody’s affirmed the firm’s ‘Aa3’ rating with a ‘stable’ outlook due to its leading position in the industry and ability to match customer requirements Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) revenue this year is expected to increase about 21 percent to NT$1.29 trillion (US$44.01 billion) from NT$1.07 trillion last year, driven by strong demand for advanced 5-nanometer and 7-nanometer chips mainly used in smartphones and high-performance computing devices, a Moody’s Investors Service report on Wednesday said. TSMC’s rate of revenue growth next year is to increase to 7.5 percent, the ratings agency said. The company, which supplies 5-nanometer chips for Apple Inc’s new iPad series, has introduced the advanced chips ahead of its competitors and gained a significant share of the market for the foundry industry’s
Sony Corp has cut its estimated Play Station 5 (PS5) production for this fiscal year by 4 million units, down to about 11 million, following production issues with its custom-designed system-on-chip (SOC) for the new console, people familiar with the matter said. The Tokyo-based electronics giant in July boosted orders with suppliers in anticipation of heightened demand for gaming in the holiday season and beyond, as people spend more time at home due to the COVID-19 pandemic. However, the company has come up against manufacturing issues, such as production yields as low as 50 percent for its SOC, which have cut into
O2O BICYCLE SHOW: The Taiwan Bicycle Show next year is to be online to offline, with forums, audio-visual conferences and livestreaming of the offline events Local bicycle makers expect demand to continue outpacing supply due to orders triggered by the COVID-19 pandemic, with some companies seeing orders back up through next year. “Next year is all full in terms of orders. Our lead time on components is one year,” Giant Manufacturing Co Ltd (巨大機械) chairwoman Bonnie Tu (杜綉珍) told a news conference in Taipei organized by the Taiwan External Trade Development Council (TAITRA) to announce next year’s Taipei Cycle Show. The pandemic has reduced bicycle supplies and increased demand around the world, Robert Wu (吳盈進), chairman of KMC (Kuei Meng) International Inc (桂盟國際), one of the world’s