What will be the overall impact of this earthquake in Japan?

Market research company IC Insights Inc. President Bill McClean recently published a report analyzing the situation in Japan and its impact on global GDP, sales of electronic systems, and the global semiconductor market. The following are the five predictions it proposes:

1. GDP will decline

“Japan accounted for 7.5% of global GDP in 2010. Preliminary estimates indicate that earthquakes and tsunami will reduce Japanese GDP by 1-3% in 2011. IC Insights believes that disruptions to the supply chain caused by earthquakes may still lead to a decline in global GDP growth. 3.4%, which led to a global increase of US$260 billion in GDP this year, and our original forecast was 3.9% growth. IC Insights currently forecasts global GDP growth of 3.6%.”

2. The electronic system will be hit

“In 2010, sales of electronic systems were US$ 127 billion, which accounted for only 2.2% of global GDP. According to pessimistic forecasts, the global GDP growth in 2011 was 3.4%. Considering that the global GDP was reduced by US$260 billion, it was multiplied by 2.2%. The loss of electronic system sales was US$5.7 billion, and IC Insights currently forecasts sales of electronic systems in 2011 to be US$1.348 billion, which will reduce US$5.7 billion from this, and this year’s sales will be around US$1,342 billion, an increase of 8.5% over 2010. , below our current estimate of 9.0%."

3, the forecast of the IC market has not changed

"According to the 'pessimistic' forecast (ie, global GDP growth of 3.4%, electronic system sales loss of 5.7 billion US dollars), from IC Insights company's current estimate of the global semiconductor market ($ 346.8 billion) minus $ 1.4 billion, global semiconductor The market will be $345.4 billion, which is still a 10% increase over 2010."

4, supply chain issues

"IC Insights believes that current (silicon) wafer inventory levels and packaging materials will help avoid serious shortages. In addition, material factories (ie, bare wafers, plastic resins, etc.) can resume production faster than IC factories. IC Insights predicts that in the next six months, many electronic systems manufacturers will try to purchase additional IC inventory, especially in the second half of the year.

5, demand will not be eliminated

“In the final analysis, due to the impact of the earthquake and tsunami in Japan, the supply of many fields related to the electronic systems and the semiconductor industry will certainly be curbed. However, from a global perspective, the demand for electronic systems and semiconductors is only expected to be due to Japan. Slight reductions due to disasters. In addition, any losses caused by earthquakes in electronic systems and semiconductor demand in 2011 are expected to be postponed or postponed until 2012 and will not be eliminated.”