The Philippines’ export recovery barreled on through 2010 on the back of strong demand for electronics, helping to shrink the trade deficit to US$3.3 billion. Through 2010, electronics remained the top import and export by value, comprising 34.6% of total imports and 59.89% of total exports. The devastating 8.9 magnitude earthquake and tsunami that struck Northeastern Japan on March 11, 2011 has caused cracks in the supply chain, through power outages and water shortages, to ripple down to affect semiconductor fabrication plant (fab) operations, infrastructure facilities, and transportation services. A report released March 21, 2010 by the World Bank titled, “Securing the Present, Shaping the Future,” said the Philippines and China “are more connected to developments in Japan than the rest of Asia.” In 2010, exports to Japan equaled 4.1% of GDP. The following addresses the effects that the spate of natural disasters in Japan will have on the Philippines’ electronics industry and growth prospects in the near-term.
Japanese Global Share of Electronics
As the world’s largest supplier of silicon used to make semiconductor chips, Japan is an integral player in the electronics industry. In 2010, Japan accounted for one fifth of global semiconductor production, accounted for approximately 14% of the world’s electronics equipment, produced US$216.6 billion worth of electronic equipment compared to US$1.6 billion worldwide, and accounted for 60% of the world’s silicon wafers. Wafers are thin slices of silicon that are the substrate of semiconductor devices.
25% of global wafer supply to take a hit
Industry researcher IHS iSuppli said the earthquake in Japan has resulted in the suspension of about one-fourth of worldwide production of silicon wafers used to make semiconductors, due to the halting of manufacturing operations at Shin-Etsu Chemical Co.’s Shirakawa facility and MEMC Electronic Materials Inc.’s Utsunomiya plant. Both fabs combine for 25% of the global supply of wafers used to make chips. Shin-Etsu Semiconductor, a major silicon wafer supplier to memory manufacturers Elpida and Toshiba, has shut down production in their silicon wafer fabrication facilities due to equipment damage, water shortages, and power outages.
Nomura sees quake to jolt silicon supply and demand back into equilibrium
Global Trade Association Semiconductor Equipment and Materials International (SEMI) reported the impact on the supply chain is due more to the aftermath tsunami and power outages resulting from the nuclear crisis. Intermittent power supplies have also obstructed the transportation infrastructure. According to Japanese equity research firm Nomura Securities Co. Ltd., “there has been an oversupply of silicon for some time now and the firm’s analysts believe this interruption may only serve to push supply and demand back into balance.” Additionally, most semiconductor products used today have established secondary sources, typically coming from another country.
JP Morgan sees disruption as temporary
Wall Street analysts predict “disruption of the semiconductor supply chain… will be temporary and limited based on inventory buffers and alternate supply.” JP Morgan analyst Christopher Danely said the investment bank remained constructive on the semiconductor sector because the disruption to the supply chain does not alter the two reasons their viewpoint changed – “the end of most of the inventory correction and a change in our belief that an economic downturn is going to happen in the near future.”
Disruptions to the automotive industry
Digitimes insight reports the aftermath from the disasters in Japan will cause significant disruptions to the auto industry’s global supply chain as the country accounts for more than 30% of total car production worldwide. The supply of automotive chips will also be affected because semiconductors used in automotive applications, such as microcontroller units (MCU), usually require a longer period of time for validation. Digitimes reports that Renesas Electronics, Japan’s largest supplier of semiconductors to the automotive sector, still has six factories which remain closed.
Philippines’ trade performance
In January 2011, electronic products remained the top import and export by value, comprising 34.6% of total imports and 53.5% of total exports. Of the total 34.6% electronic products imported, semiconductors accounted for 28.8% at US$1.531 billion. Imports from Japan accounted for 10.5% of the total import shipments worth US$560.24 million. Of the total 53.5% electronic products exported, semiconductors comprised 39.7% at US$1.588 billion. Exports to Japan accounted for 14.1% of the total export shipments at US$565.81 million, the country’s third largest export market. The Philippines will be hurt by its strong relationship with Japan as 618 out of the 2,272 locaters in the country’s economic zones are Japanese electronics companies involved in semiconductor and auto parts manufacturing.
Philippines’ electronics industry and investments to take a blow
Ernesto Santiago, president of the Semiconductor and Electronics Industries in the Philippines, Inc. (SEIPI), said 18% of SEIPI’s total members are Japanese firms; these firms accounted for 20% of the Philippines’ total export in 2010. SEIPI warns that the major impact on Japan’s production is disruption to the supply chain. SEIPI provides news updates concerning developments in Japan. Trade and Industry Undersecretary Cristino L. Panlilo said that of the country’s total US$51 billion exports last year, US$31 billion were electronics and semiconductors; of the US$31billion, “20% involved Japanese firms that export and import local components for local assembly and reexport to Japan.” Panlilio warned these developments could cause a slowdown in investments inflow into the country.
Trade and Industry Secretary says Japanese firms have spare capacity
According to Trade and Industry Secretary Gregory L. Domingo, most of the Japanese manufacturing firms are operating using their inventory levels. Domingo said that “if the shutdowns are prolonged then the gaps could be bigger. We offer to fill in these gaps and provide assistance.” Japanese companies with local subsidiaries have spare capacities they can temporarily tap. ON Semiconductors, which operates six production facilities in Japan, has closed two sites due to damage to infrastructure services and is identifying options to shift production to its other facilities. ON Semiconductors operates two facilities in the Philippines, a Manufacturing Facility in Carmona and a Wafer Sort and a Final Test facility in Calamba Laguna.
Near-term prospects for the Philippines main import and export drivers, electronics and automobiles, remain gloomy as disruptions to supply chains in Japan increase the pricing of components. In response, manufacturing firms are considering obtaining alternative products by expanding local procurement and purchases from overseas manufacturers. Firms in the electronics and automotive industries are still assessing damages to their operations.
The disaster in Japan will weigh heavily on investments and remittances in the coming year. In 2010, remittances from Japan totaled US$883 million, 4.7% of the country’s total remittance receipts. Investments are also set to take a blow as Japan is the leading source of direct investment to the Philippines. According to the National Statistical Coordination Board (NCSB), of the total US$4.5 billion of foreign investments approved by the Philippines’ investment agencies in 2010, US$1.2 billion (27%) came from Japan. Rebuilding efforts in Japan may cause investments to be rechanneled to help foot the bill for reconstruction. This may compel the Aquino administration to reconsider selling Samurai bonds and switch to selling dollar-denominated notes to help narrow the country’s budget deficit.
68 Responses to “Philippines’ Electronics and Automotive Industries Feel the Aftershocks from the Tohoku Earthquake”
1203576 beers on the wall.
Great article. I was checking continuously this blog and I am impressed! Extremely helpful info particularly the last part. I care for such info much. I was looking for this certain info for a long time. Thank you and best of luck.
Bless you for this specific info I was basically looking around all Yahoo to be able to find it!
Bless you for this specific material I had been checking all Yahoo in order to discover it!
I’m also commenting to let you know what a fine discovery my wife’s princess had going through your webblog. She picked up so many issues, not to mention how it is like to possess an excellent coaching character to let other folks without hassle master various advanced subject areas. You really did more than our own desires. Thank you for displaying these priceless, dependable, edifying and unique guidance on this topic to Lizeth.
This is a superb hints primarily to individuals new to blogosphere, brief and precise information… Thanks for sharing this 1. A need to examine article.
fine to study a little something exhilarating because, additionally if you’d like to find out more on clubpenguin compared with consider a blog page to learn more.
When do you think this Real Estate market will go back right side up? Or is it still too early to tell? We are seeing a lot of housing foreclosures in Altamonte Springs Florida. What about you? Would love to get your feedback on this.
The wise person has long ears and a short tongue.
I really loved the post so I used my Digg account to digg it.. It’s hard to find knowledgeable individuals on this matter, but you sound like you already know what you’re talking about! Thanks A rise in Amazing A lot more.
With havin so much content and articles do you ever run into any problems of plagorism or copyright infringement? My site has a lot of unique content I’ve either written myself or outsourced but it appears a lot of it is popping it up all over the web without my permission. Do you know any solutions to help reduce content from being ripped off? I’d certainly appreciate it.
Full Moon Party Thailand…
[...]below you’ll find the link to some sites that we think you should visit[...]…
This was a actually pretty great publish. In theory I’d like to write like this also – getting time and actual effort to make a good piece of writing but what can I say I procrastinate alot and by no means seem to obtain anything done.
היי תכננתי ךהודיע על אתר ברשת האינטרנט העוסק קידום אתרים בגוגל. בוובסיט אפשרלראות במידע על קידום אתרים בגוגל.
היי רציתי להמליץ לכם על חברה מובילה במכירת רהיטים, מזרונים ,מזרנים ועוד .
Spot on with this write-up, I truly think this web site needs far more consideration. I’ll in all probability be once more to learn way more, thanks for that info.
I discovered your weblog site on google and check a couple of of your early posts. Proceed to maintain up the very good operate. I simply extra up your RSS feed to my MSN News Reader. Looking for ahead to studying more from you afterward!Ö
Also a thing to mention is that an online business administration training course is designed for students to be able to effortlessly proceed to bachelor’s degree programs. The 90 credit diploma meets the lower bachelor diploma requirements and when you earn the associate of arts in BA online, you may have access to the most up-to-date technologies within this field. Several reasons why students would like to get their associate degree in business is because they are interested in this area and want to have the general education necessary prior to jumping to a bachelor diploma program. Thx for the tips you provide in the blog.
Fashion Courses Online…
[...]we like to honor other sites on the web, even if they aren’t related to us, by linking to them. Below are some sites worth checking out[...]…
Hello there! Do you know if they make any plugins to safeguard against hackers? I’m kinda paranoid about losing everything I’ve worked hard on. Any tips?
Fabulous piece,I do believe you’ve definitely designed a web site I have to come back to daily. Keep it up.
היי רציתי להמליץ לכם על מקום שבו דואגים לכם לאירוע מושלם על מכלול מרכיביו .מפיקה אישית ומקצועית תלווה אתכם משלב הרעיון ועד שלב הביצוע אשר יהפוך את האירוע שלכם לחוויה המושלמת.
pretty valuable material, overall I think this is worthy of a bookmark, thanks
Many thanks for sharing this very good article. Very interesting ideas! (as always, btw)
Today, while I was at work, my sister stole my apple ipad and tested to see if it can survive a twenty five foot drop, just so she can be a youtube sensation. My iPad is now destroyed and she has 83 views. I know this is completely off topic but I had to share it with someone!
Thanks for taking the time to discuss this, I feel strongly about it and love studying more on this topic. If doable, as you acquire experience, would you mind updating your weblog with extra information? This can be very helpful for me.
Hello guys, I randomly find this cool site that helps you build thousand of links that will stick and improves your site rankings, Visit This I hope you have a good day!
Hello guys, I randomly find this cool site that helps you build thousand of links that will stick and improves your site rankings, Click Here I hope you have a nice day!
I think that is an enchanting aspect, it made me think a bit. Thanks for sparking my considering cap. Now and again I get so much in a rut that I simply really feel like a record.
Howdy! I simply would like to give an enormous thumbs up for the good information you might have here on this post. I shall be coming back to your weblog for extra soon.
היי, אני חושב להציע לכל האנשים בעניין אתר אינטרנט עם מידע חשוב בעניין קידום אתרים בגוגל וגם מנועי החיפוש.
Ha ha… I was just surfing around and took a look at these remarks. I can’t believe that there’s still this much interest. Thanks for posting about this.
Many thanks for making the effort to talk about this, I feel strongly about this and like studying a great deal more on this topic. If feasible, as you gain expertise, would you mind updating your weblog with a great deal more details? It’s very helpful for me.
I was very delighted to locate this site on google.I wanted to say many thanks to you with regard to this fantastic read!! I certainlyenjoyed every little bit of it and I’ve you bookmarked to take a look at new stuff you post.
Howdy this is somewhat of off topic but I was wondering if blogs use WYSIWYG editors or if you have to manually code with HTML. I’m starting a blog soon but have no coding experience so I wanted to get guidance from someone with experience. Any help would be enormously appreciated!
Your posts continually include much of really up to date info. Where do you come up with this? Just saying you are very innovative. Thanks again
Verifying The actual State to your Income tax Reimbursement On the internet.
Awseome article, I am a big believer in leaving comments on websites to let the blog writers know that theyâ€™ve added something worthwhile to the world wide web!
Thanks for taking the time to discuss this, I feel strongly about it and love studying more on this topic. If doable, as you gain experience, would you thoughts updating your weblog with further data? This can be very helpful for me.
Congratulations on possessing definitely one in all some of the refined blogs Ive arrive across in a while! Its simply wonderful how a lot you’ll be capable to contemplate away from a thing mainly simply due to how visually stunning it is. You’ve place collectively a terrific weblog website area –nice graphics, motion pictures, layout. This is definitely a must-see website!
I’ve been following your web site for some time now and finally, I decided to write this post in order to thank you for providing us such a fine content!!! :)
Good day! Would you mind if I share your blog with my facebook group? There’s a lot of people that I think would really appreciate your content. Please let me know. Cheers
You lost me, buddy. I mean, I suppose I get what youre declaring. I understand what you are saying, but you just seem to have overlooked that you can find some other folks within the world who look at this matter for what it actually is and may well not agree with you. You may well be turning away a lot of men and women who might have been lovers of your site.
I merely desired to create a quick comment as a way to express gratitude to you personally for the people wonderful pointers that you are posting here. My own time consuming internet investigation has by the end of waking time been rewarded with good quality strategies to present to my guests. I’d personally claim that a number of us prospects are very endowed to happens to a wonderful network with the greatest marvellous those with useful hints. I’m quite privileged to get used your webpages and appearance forward to really more fabulous minutes reading here. Thanks again for many things.
You lost me, friend. After all, I imagine I purchase what youre saying. I am aware what you’re saying, but you just appear to have forgotten that might be other sorts of folks within the world who view this matter for it is actually and may perhaps not believe you. You could be turning away alot of people who had been lovers within your website.
Greetings I am so thrilled I found your site, I really found you by mistake, while I was searching on Digg for something else, Nonetheless I am here now and would just like to say many thanks for a incredible post and a all round entertaining blog (I also love the theme/design), I donít have time to read through it all at the moment but I have book-marked it and also included your RSS feeds, so when I have time I will be back to read more, Please do keep up the fantastic work.
Bizarre this post is totaly unrelated to what I used to be looking out google for, nevertheless it was listed on the first page. I guess your doing something proper if Google likes you adequate to position you at the first page of a non comparable search.
I was very ecstatic to discover this site on bing.I wished to say thanks to you with regard to this superb article!! I undoubtedlyappreciated every little bit of it and I’ve you bookmarked to look into new stuff you post.
Can’t wait for your next post. Thank you!
Your current positions normally have got many of really up to date info. Where do you come up with this? Just saying you are very inspiring. Thanks again
Hello this is a great post. I’m going to e mail this to my buddies. I came on this while browsing on yahoo I’ll be sure to come back. thanks for sharing.
Excellent blog, I enjoyed reading it
I’m not sure exactly how I found this blog because I had been researching information on Real Estate inWinter Springs, FL, but anyway, I have had a pleasant time reading it, keep it up!
Thanks for making the honest effort to speak about this. I feel very strong approximately it and would like to read more. If it’s OK, as you acquire extra intensive knowledge, could you mind including more articles similar to this one with more information? It could be extraordinarily helpful and helpful for me and my friends.
Thank you for making the sincere attempt to talk about this. I feel very sturdy about it and would like to learn more. If it’s OK, as you gain extra extensive wisdom, would you mind including extra articles similar to this one with more information? It would be extremely helpful and helpful for me and my friends.
Pretty nice post. I just stumbled upon your blog and wanted to say that I have really enjoyed browsing your blog posts. In any case I’ll be subscribing to your feed and I hope you write again soon
I was just searching for this information for a while. After 6 hours of continuous Googleing, finally I got it in your site. I wonder what’s the lack of Google strategy that don’t rank this kind of informative websites in top of the list. Generally the top websites are full of garbage.
When do you think this Real Estate market will go back in a positive direction? Or is it still too early to tell? We are seeing a lot of housing foreclosures in Winter Park Florida. What about you? I would love to get your feedback on this.
Youre so cool! I dont suppose Ive read something such as this before. So nice to get somebody with authentic ideas on this subject. realy i appreciate you for starting this up. this excellent website is one area that’s needed on-line, somebody with a little bit originality. helpful problem for bringing new things to your web!
היי רציתי להציג לכם אתר עם פתרונות תקשורת ומבחר מוצרים של מרכזיות מכשיר טלפון וטלפונים,חכמים.
What you said made a lot of sensation. But, believe about this, what should you extra a bit content material? I mean, I dont want to tell you the way to run your website, but what if you added some thing to perhaps get peoples consideration? Similar to a video or perhaps a picture or two to have people fired up about what youve received to say. In my view, it might make your web site come to existence just a little bit.
The fundamental resources that are desired on organising RECREATIONAL VEHICLE solar panel products undoubtedly are a Bill Controller, some sort of Inverter, a good storage space battery power and definitely, an important screen.
Very Nice web site. I recently designed mine and that i was longing for some ideas and you gave me a number of. may i raise you whether you developed the website by youself ?
Thanks for your Post! It was very helpful.
I’ll perfect away grab your rss as I can’t come across your email subscription link or newsletter service. Do you’ve got any? Please let me know in order that I could subscribe. Thanks.
Good work, beautiful blog with great informational content. This is a really interesting and informative post.
Many thanks for bothering to line this all out for people like us. This kind of blog post ended up being incredibly helpful to me.
It's amazing to see how much the tragedy in Japan could affect markets, such as the automotive industry, in other countries. In times like this, a sound marketing plan – automotive seo included – will be vital in retaining customer interest despite the calamity.