The technology sector, it was once hoped, might be a safe haven. But it has proved merely another refuge to be blown away by the winds of the credit crunch. Research released by Forrester on Tuesday found that 43 per cent of large global companies have cut IT budgets this year, adding to mounting gloom. During the past two weeks Dell, Qualcomm, Corning, Ciena and Nokia have warned, in various ways, of softer demand – and most have suffered double-digit share price falls, dragging down both European and US peers. The Nasdaq Composite’s recent 5 per cent slide outstripped the S&P’s 3 per cent fall.

The challenges facing tech companies are now spreading outside the US and all along the technology chain. Demand in Europe and Asian emerging markets that had partly offset US weakness is slowing. The stronger dollar makes things worse for US groups, though provides a modicum of relief for European counterparts. Corporate and domestic customers are both being squeezed. Forrester’s survey found nearly half of financial services companies, their balance sheets creaking, have trimmed IT spending. Ciena warned that phone companies, feeling no urgency to upgrade technology, are delaying new contracts. And cash-strapped consumers are, says Qualcomm’s chief, keeping old mobile phones longer. That is forcing some handset makers to cut prices, although Nokia says it will not follow suit. Even segments enjoying growth, such as LCD TVs, are not immune. Corning cut projections of sales of glass for LCD panels after TV assemblers built up excess stocks.