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Lex is a premium daily commentary service from the Financial Times. It helps readers make better investment decisions by highlighting key emerging risks and opportunities.

This time last year, Asia's tech supply chain went to Computex, the global industry's giant trade show in Taipei, with the hope that Windows 8 would be its saviour. Few can be hoping the same from the updated Windows 8.1, even if it does bring back the Start button. The industry is in need of its own one-click reboot and it has not found it yet.

It will not help the mood of visitors to the show, a more down-to-earth version of the January's U.S. CES extravaganza, that Taiwan's manufacturing activity has begun shrinking, according to Monday's purchasing manager survey that recorded the fastest drop in almost two years. Asia makes about 90 per cent of the world's notebooks and desktop motherboards, according to Barclays. Many of them are made in, or managed from, Taiwan. HSBC's Asian electronics indicator, which leads the region's tech cycle by about two months, just registered its first negative reading in seven months. Analysts at Barclays expect production this quarter to be below its seasonal average – for the fifth quarter in a row.

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And yet the tech-laden Taiex is hardly Asia's worst-performing index. Its 6.5 per cent gain this year beats Hong Kong, Kuala Lumpur, Seoul, Shanghai and Singapore, and its tech sector, which foreigners are more heavily invested in, is up 7.6 per cent. In forward price-earnings terms the Taiex, at 15 times, is in line with its average, or slightly over stripping out the wild post-Lehman swings.

Taiwan's tech royalty are hardly standing still: Hon Hai, or Foxconn, just announced a tie-up with Mozilla's Firefox operating system that will take it beyond contract manufacturing. It seems a smart move in such a brutally competitive industry, if too early to really judge. But that is the problem with Taiwan's techs: it is hard to write them off but for now, it is just as hard to actively back them further.

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