Standard & Poor's has said that China and India could help mitigate the effects of the global economic crisis in Asia by recording positive growth during 2009.

According to S&P, China will post growth of eight per cent, while India should enjoy a brisk rate of seven per cent.

"(The) Asia-Pacific [region] is expected to be able to roll with the punches - although some economies such as Japan and Singapore are likely to experience quarters of negative GDP growth," explained Subir Gokarn, S&P’s Asia-Pacific region chief economist.

Gokarn also noted that the supportive monetary policies adoped by regional government would facilitiate positive growth in 2009. According to Gokarn, Taiwan could outperform Australia, Hong Kong and New Zealand, with a GDP growth of between 1.8 per cent and 2.3 per cent.

As IT Examiner previously reported, Taiwanese president Ma Ying-jeou has attempted to downplay a serious decline in IT exports. The president emphasised that the country's high-tech industry would have the opportunity to "experience prosperity" in 2009 despite recording negative growth. However, Ma admitted that exports had declined as markets in the US, Europe and China contracted. Nevertheless, Ma reiterated that Taiwan's technology sector remained sound and would eventually recover with government assistance.

Vice president Vincent Siew expressed similiar sentiments, and insisted that Taipei would not abandon the memory industry, which currently accounts for 30 per cent of global supplies. Siew also encouraged the industry to "consolidate".

"If our DRAM industry in Taiwan can't take advantage of this opportunity and upgrade and become more competitive, even without the financial crisis, you can't survive," Siew told an American Chamber of Commerce meeting.

The slump in the price of DRAM has prompted the government to provide local manufacturers with financial aid. Taiwan has also granted embattled firms six months grace from creditors as well as bank loan extensions. Nevertheless, pessimistic market analysts continue to project significant losses for the industry and predict a total yearly deficit of $3 billion. For example, South Korea's Hynix Semiconductor lost over $1 billion during the third quarter of 2008, while US-based Micron Technology recorded quarterly losses of US $344 million.

The grim outlook for memory manufacturers is not expected to improve any time soon. Analysts estimate a sequential drop of approximately six per cent, or 70,000 wafers (12-inch equivalents), in overall DRAM output during the first quarter of 2009. This could force large Korean manufacturers to formulate cost-cutting alliances with Taiwanese companies. X

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