This year Japan has witnessed an uptick in both air and containerised ocean trade. But things are not always as they seem, with much of this growth a consequence of the depreciation of the Japanese Yen. Nevertheless, some sectors and markets are showing real growth and changing dynamics in the world trading system may bring opportunities in the medium term. This includes semiconductors and automotive, and trade with Southeast Asia and North and Central America.
Posts tagged as “semiconductors”
Global semiconductor sales dropped about 8% in 2023 but are expected to recover in 2024. As integrated circuits are found in most key products, this underlines the likelihood of a recovery of world trade in 2024. However, trade flows are likely to change over the coming years as China, the US and Europe build up own capacity and support the development of new fabs in South and Southeast Asia. Machinery trade indicates an emerging shift away from Taiwan and Korea based production of integrated chip production.
The Philippines accounts for about 18% of Southeast Asia’s population and about 12% of its economic output. The Philippines and with Indonesia and Vietnam are expected to be within the top three performers in the region in terms of economic growth, imports and exports. Philippine import and export performance has been disappointing this year, but after a weak first quarter volumes have been picking up since the middle of the year. Indicators point towards further strength.
PRC (including Hong Kong), USA, Germany, and the UAE today account for about 56% of import and 40% of export value. The importance of China as a source of imports and the US as a source of exports has increased. On a commodity level, Indian exports have diversified away from apparel and footwear towards industrial equipment and parts and mobile phones and communication equipment. The import side has seen an increase in the importance of semiconductors and related equipment. Pharmaceutical and automotive exports have grown, but their share of total trade value has stayed constant.
Trade in integrated circuits is worth almost $1 trillion annually. This includes processers, controllers, memory chips and the like, which form the centrepiece of most things we use or drive. Machinery and related parts, accessories and tools for producing semiconductors are worth another $100 billion per year. The value of semiconductor and machinery trade is higher than it was in 2018, but trade patterns are changing significantly with new production capacity being established around the world and not just in China and the United States.