Monday, March 14, 2011

Japan Earthquake/Tsunami 2011 and its Effects on Tech Sector

The Technology Sector is feeling the effects of tsunami, locally as well as globally.



A Disaster of unforseen proportions, the biggest natural disaster in the history of the country. Even comparable to the man made WWII.
We at Tech Tabloid take this moment in time to stand beside our readers and everyone from the Earthquake/ Tsunami stricken Land of the Rising Sun. We feel for you and support you in every way possible.
Dear readers, please  take some time and donate to Medicins Sans Frontiers aka Doctors Without Borders' Emergency relief operations in Japan or donate to Save the Children organization.
         
  

           



Now, coming back to the big Question. How has the tsunami affected the Tech sector?

Japanese Consumers:
The Japanese people are known to be early tech adapters. On average they spend more on the hi-tech gadgets than people elsewhere. Now, as millions of people are affected by the earthquake and tsunami, less people will buy gadgets and hi-tech products. More people will try to help in the rehab and reconstruction, as consequence less circulation of tech related products. No one would be in a rush to buy the new iPad 2 in the backdrop of disaster.

Japanese Manufacturers:
"Made in Japan" a sign of excellece. Sony, Panasonic, Fujitsu, Canon, all are Japanese brands.
Sony corp. has announced that they have closed 6 of their factories, in the disaster stricken area. These factories have suffered physical damage. As a consequence the supply line of many electronics products will be affected. e.g Blu-ray players, which are widely used in standalone blu-ray set tops as well as in laptops and PS3s. It is not known how long will it take to get them back to production.
Toyota, Honda and Nissan, one the biggest names in the Automobile industry worldwide, have shut down 3, 2 and 4 Production facilities respectively.
Panasonic released a statement in which it said its EV Energy plant in Sendai had been destroyed by the tsunami.
In the aftermath of this disaster, the people working in those affected facilites will be foucusing their energies on reconstruction of their homes rather than going to offices.

Power Crisis:
The earthquake, which measured 8.9 on the Richter scale, and the 10-metre high tsunami, has shut down ports, power plants and refineries. 3 Nuclear reactors are affected in the disaster stricken area, facing eminent nuclear meltdown. Electricity shortage is reported in the area and we know that nuclear plants are not built in a couple of days.
So if the manufactoring facilities were repaired overnight, even then, without electricity, the production would not start.



Transportation and international Supply chain:
All major ports in Japan are  closed since Friday, after the quake and tsunami that followed. If the ports remain closed for an extended period, exports of the country’s products to the world may delay. This includes all the tech gadgets. This will also affect the japanese imports as much as exports.

Conclusion:
  • The cost of clearing up the damage done could run into the billions.
  • Rescue, Rehab and Reconstruction will take the focus of the government and major companies.
  • The Tech industry is hit hard and in more than one ways, there is an acute shortage of Power. i.e
    • Man-Power
    • Buying Power
    • Electricity 
  • Supply lines are disrupted, Even if the production is continuing.
  • The prices of many consumer electronics could and will  rise.
  • The Electronics and Automobile Giants have the capacity to rebound, but it will take some time
  • Full scale of the damages is still unknown as thousands of people are still missing
  • Hope for the best but prepare for the worst.


Update:
27,500 people are dead or missing.
Estimated 125,000 buildings damaged.
Estimated immediate damages at $300 billion

This is the google's people finder, setup specially for the 2011 earthquake and tsunami relief efforts.

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