: Mumbai, March 31, 2011
The crisis situation in Japan following the March 11 earthquake and tsunami has impacted the global supply chain business big time. With as many as 40% of world’s electronic components produced in Japan, business in several countries of the west including the USA has taken a blow due to the damage and breakdown of huge number of Japanese factories. In fact the blow to United States industries with auto parts, graphics chips and other high-end components has been a much disturbing effect, so much so that some industries have actually shout down temporarily. Even a big name like General Motors Co has shut down their factory that makes pickup trucks in Louisiana due to a lack of parts from Japan.
In addition to automobiles and electronics, the Japan crisis has also impacted the market for telecom component markets. The global revenue of telecom component market is currently estimated to be around 5.6 billion dollars of which Japanese companies alone contribute to about 30%.
However, with Japan’s sudden fall, the situation has proved to be a boon for companies of South Korea and Taiwan. In fact Suppliers of electronics and other components in Taiwan and Southeast Asia are already seeing an increase in their demand with customers eyeing alternatives to their Japanese counterparts. There are reports of Taiwan’s company Foxconn Technology receiving orders from Sony Corporation to produced TV, digital cameras, etc and several other companies have confirmed increase in their production due to the damage suffered by Japanese chip makers. The same is expected from similar companies of South Korea too, however the country is found to maintain a diplomatic silence on the issue so far.Amidst such turbulent situation, the hopes for a Japanese industry revival, however is still bright .The recovery stage in Japan, a country boasting of superb technology and adversity to re-rise, is set for an increase in demand of all industries affected so far. This coming stage is also expected to create a lot of buying opportunities, especially given the fact that mergers and acquisitions are relatively high in numbers in the Japanese market.