Electronics Sector Slows Down as NODX Slips in January

The electronics sector, once a key growth engine for Singapore's non-oil domestic exports (NODX), has shown signs of slowing down in January 2025. According to data from UOB Global Economics & Markets Research, NODX contracted by -3.3% month-on-month (MoM) in January, marking the first decline after two months of growth. On a year-on-year (YoY) basis, exports dipped by -2.1%, reversing the +9.0% increase in December 2024.

Analysts attribute the weaker performance to less favorable base effects and seasonal factors linked to the earlier Chinese New Year this year. The electronics sector, which had been a key growth engine in late 2024, saw YoY growth slow to +9.6% in January—down from +18.6% in December. The base effects from 2022 and 2023's strong performance are now fading, limiting the potential for continued double-digit growth.



Integrated circuits, the largest electronics export segment, expanded by +14.6% YoY, while personal computer exports grew by +66.7% YoY—both slower than the previous month. Despite these challenges, UOB has maintained its NODX growth forecast at +1.5% for 2025, aligning with Enterprise Singapore's official estimate of +1.0% to +3.0% growth for the year.

To maintain growth and adapt to the changing market dynamics, electronics companies can employ several strategies:

1. Diversify Product Portfolio: Electronics companies should diversify their product portfolio to cater to different market segments and reduce reliance on a single product category.
2. Premiumization: As consumers seek exceptional experiences, companies can focus on premium products with enhanced features.
3. Consumer-centric Strategy: Electronics companies should adopt a consumer-centric approach to understand and meet the evolving needs of their customers.
4. Geographical Diversification: Electronics companies can explore new markets to offset slower growth in established markets.
5. Investment in Emerging Technologies: Electronics companies can invest in emerging technologies like artificial intelligence, Internet of Things, and 5G to create new product categories and maintain growth.
6. Resilience in Supply Chain: Given the geopolitical tensions and supply chain disruptions, electronics companies should focus on building resilience in their supply chains.

By adopting these strategies, electronics companies can better adapt to the changing market dynamics and maintain growth despite the fading base effects from 2022 and 2023's strong performance.