As the global economic crisis continues to wreak havoc on many industries, the tech sector which had previously been seen by some analysts as recession proof is beginning to feel the pinch. Demand for computer chips has slumped and the cracks in the industry are beginning to show.

Intel the worlds largest chipmaker which provides 80% of the global market announced recently that they would not be able to make profits of $1 billion as expected due to a slump in demand of computer chips by those in the computer making industry. Computer manufacturer Hewlett Packard has announced that there will be 25,000 job cuts.

Cut backs by consumers on items such as personal computers means that those on the supplying end are suffering adversely as they make the necessary adjustments by cutting back on staff and using up whatever stock they have to try and save money. The effects of what is now referred to as a “global financial tsunami” are being felt by Cisco systems the worlds largest maker of networking gadgetry. Orders are said to have fallen sharply in October. There are fears that this will lead to a domino effect as other tech companies come tumbling down in the same way we saw various banks collapsing.

If the tech sector is seriously affected by the economic wows that we now face, there is a potential for many countries particularly in the third world to be flung far off the wrong end of the digital divide at a time when most nations are moving towards modernization and becoming tech-reliant. Our ability to interact with other people in this global village could also be affected. With social networking being the order of the day, the average person spends at least more than two hours a week online.

A slow down in the tech sector would mean a return to old fashioned face to face networking and a reversal in global networking.

E-Commerce has not been left unscathed. E-commerce economy analysts have observed a fall in spending online. The simple explanation is that as consumers spend more on essentials they are left with less discretionary funds.

Despite the gloomy outlook, some analysts are optimistic that once the economy starts to recover, there will be enormous opportunities for consumers to put their money in ventures that have huge potential for growth.