Japan Quake Aftermath

We Predicts Quake's Impact on Electronics Will Be Limited March 11 Japan earthquake and tsunami disasters will shave 1.5% from global GDP in 2011 and contribute to a slight softening in the semiconductor and electronics market. These short-term effects will be limited, however, and the market should quickly recover. The Japan disaster will help reduce worldwide GDP growth to approximately 3.4 % this year, compared with an earlier estimation of a 3.9% expansion. This will reduce the global economy by about $260 billion, assuming the Japanese economy declined by 5.2% in 2011. Taking the pessimistic situation of a 3.4% worldwide GDP growth rate in 2011 (as compared to our current forecast of 3.6% growth), and the associated $260 billion negative impact on worldwide GDP, and multiplying it by 2.2% yields an electronic systems sales loss of $5.7 billion. Subtracting $5.7 billion from current 2011 electronic system sales forecast of $1,348 billion would put electronic system sales at about $1,342 billion for this year, an 8.5% increase over 2010 compared to our current forecast of 9%. The forecasts may represent the best short-term outlook for the industry and the worldwide economy, assuming oil prices stay relatively stable at around $100 per barrel. We believe even a worst case scenario where the economy is more heavily affected would still not dramatically Ref. IC Insights HK Snob