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Neutral 2022 Outlook for U.S. Technology

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Neutral 2022 Outlook for U.S. Technology

Posted by: Latin Brains
Category: All, Industry analysis

The technology industry in the United States has a neutral outlook for 2022, according to Fitch Ratings, with strong demand recovery offset by supply chain restrictions.

In 2022, Fitch forecasts sustained investments in workflow modernization, artificial intelligence, the internet of things, and 5G to sustain high-single-digit overall technology growth.

Supply chain restrictions will continue to be an issue far into 2022, before beginning to lessen in 2H22. Given the broad-based demand signals and continued component shortages, semiconductor foundry overcapacity should not be a worry before 2023.

Factors that could affect the industry’s trajectory include continuing supply chain constraints and capacity growth, regulatory scrutiny delaying M&A transactions, inflationary pressure, and geopolitics influencing supply chain evolution with potential to disrupt the global technology supply chain.

As maturing business models migrate to profit optimization, leveraged buyouts (LBOs) of vertical software companies will be a recurring theme.

Author: Latin Brains