Japan’s Earthquake Disrupts Raw Material Sourcing For Electronics Exporters In Philippines

March 23, 2011

The earthquake and tsunami that ravaged Japan on Friday, March 11, 2011 is the worst calamity since WWII. There has been a global impact that is still roiling financial markets. Electronic exporters in the Philippines are concerned that there will be problems with obtaining raw material from Japan. Filipino businessmen are already factoring in the economic losses emanating from Japan’s disaster.

Semiconductor and Electronics Industries in the Philippines Inc. (Seipi) president, Ernesto Santiago said in a statement, “A prolonged abnormalcy in Japan will certainly affect the material supplies . . . as, incidentally, most of the electronics industry locators in the Philippines are Japanese-owned companies.”

He added, “Seipi member-companies reported that the major earthquake that hit Japan last Friday caused railways servicing northeastern Japan and Tokyo to a ground halt and closure of airports. Cargo planes did not accept shipments and have implemented an embargo . . . due to damages to their warehouses and heavy backlog caused by last Friday’s incident.”

Santiago continued to say that most of the impact on Japan’s semiconductor manufacturing will not be from damaged factories. However, a supply chain disruption is cause for alarm. This translates to suppliers encountering problems in acquiring raw materials distributed. And it will also mean a delay in shipping out products.

In 2010, companies in Japan accounted for 13.9% of income from global electronics. Additionally, about 20% of all SEIPI firms are companies headquartered in Japan and approximately 20% of Filipino electronics exports are produced by Japanese companies.

The Philippine Long Distance Telephone Co., also known as PLDT releaed a statement saying that network links to America are still working in the wake of the earthquake that destroyed northeastern Japan with a magnitude of 8.9 on the Richter scale.

Several Asia-US links and connections within Asia will be disrupted due to the quake, reports tmcnet.com.


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