Global economic instability is likely to compound the challenges facing tech companies. Owing to conflicts such as the Russian invasion of Ukraine and geopolitical tensions in Asia,tech companies may witness product shortages and delays, service disruptions, bankruptcy of core suppliers, increased product costs, and reduced global sales in the months ahead.29 Additionally,tech companies that have prior purchase commitments with their suppliers will be constrained to buy components at higher prices than those available in the current market, which will affect gross margins. In 2023, tech companies should consider revising supplier agreements to reflect new circumstances.
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