Technology Japan Tech Hardware: Diverging outlooks

Japan's slowing macro economy is negative for all industries, but degree & timing varies. Largest & earliest impact is on capex-driven hardware, automotive, servers & other IT hardware; least negative impact is on IT services.

21 Apr 2020

Impact degree and time lag to be affected by COVID-19

Source: UBS

The figure shows the impact degree and time lag of effects of COVID-19 on various industries, from immediately to two years later.

Intensity and timing of impact will differ by industry

We analysed past data by industry. The areas that see the earliest and largest impact from macroeconomic slowdowns are capex-driven hardware, automotive, IT hardware (servers), and consumer audiovisual equipment. Those where the negative impact comes somewhat later are the housing-related white goods, lift, and air conditioner industries and the IT services market. Cabling and electric rolling stock, both of which are tied substantially to public works investment, are also unlikely to avoid a negative impact this time. However, we also focus on potential upside from government support measures

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