The State Bank of India had suspended trading in foreign exchange. A number of banks would not honor letters of credit essential for facilitating overseas trade. There just wasn't enough optimism toward the U.S.'s $700 billion bailout or the U.K.'s plan to pump £400 billion ($692 billion) into a sector ailing from "innovative" financial instruments.

Meanwhile, China's government was encouraging domestic consumption to try offset an imminent slump in exports. Singapore's economy had gone into recession after having declined for a second straight quarter. Its 2009 economic growth was being estimated slower than the 3 percent originally expected, according to statements by current senior minister, Goh Chok Tong. South Korea's government announced a package worth about $130 billion that includes a state guarantee on foreign debt and recapitalization of financial firms. Indonesia said it won't face an economic meltdown like the one in 1997 because they had ample foreign exchange reserves.

Effect on industry
The impact of the financial disaster on many companies in the technology industry is likely to be felt early next year when depressed consumer spending takes its toll after Christmas. iSuppli Corp. has trimmed the 2008 chip forecast to a mere 3.5 percent growth. The firm says the credit crunch will depress demand at three levels—at the Wall Street firms, other companies unable to get credit and consumers who will spend less if the overall economy collapses.

Gartner Inc. expects semiconductor industry capital spending to decline by 25.7 percent this year and another 12.8 percent in 2009 before showing a positive trend in 2010. The firm said semiconductor unit shipments will grow by nearly 10 percent in 2008, but lower average selling prices will cause revenue growth of only about 4 percent.

A depressed demand in the U.S. could hurt back-office IT contracts. That country accounts for about 76 percent of India's total IT exports. Thus, Indian IT enterprises are planning to seek alternative markets in other regions. Most India-based tech executives I met early October expect recovery in Q4 09. Some even see the downturn as an opportunity—more design and manufacturing work is likely to be offshored to cut costs in developed, expensive locations.

No matter which way the wind blows, it's clear that Asian engineers will face pressures like never before to cut costs and reduce power consumption—in short, innovate their way out of demanding times. EE Times-Asia wishes you the best as you burn the candle at both ends to meet your design goals.

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