2011 Asia Business SA

By Miguel Helft and Nick Bunkley

New York Times, March 15, 2011

Japan is an important producer of chips that are used in many different electronics sold around the world. Many devices that aren’t made in Japan still have parts that made in Japan and included in the manufacturing process. With the devastating earthquake and tsunami many factories have closed down and that has driven the world price of memory chips up almost three dollars. At the same time production of many Japanese cars has halted in Japan and it is being slowed down in other countries as well because the cars often require parts that are made in Japan. We could see a shortage of new cars and electronics on the market in the next few weeks which can drive up the price temporarily.

With all the aftermath of the Japan's great earthquake, Japanese business news continues to make headlines despite the humanitarian needs of the island nation. Aside from the expected production-halting in the Japanese automotive industry, Apple has interestingly (and sensitively) delayed it launching of the iPad 2 as the country obviously "has other things on its mind right now." 


In a public statement, Apple stated that "Our hearts go out to the people of Japan, including our employees and their families who have been impacted by this terrible tragedy" and also reported that all of its Japanese employees are safe. 


While I'm sure that the launching delay was somewhat motivated by the risk of slow sales in Japan due to the earthquake (compare to the iPad 2, which sold more than 1 million units in it's first week in the U.S.), I am convinced that the delay was also due to some empathetic VPs and solid PR at Apple. I am so glad that, despite cash being king, concern for other humans still trumps all--even in the business world, occasionally. --Philip Volmar

Following the recent natural disasters in Japan, many factories have halted production. Some companies that closed factories are Sony, Toyota, Canon, Nissan, Honda, and Panasonic. Although the country’s GDP may fall by as much as 1%, with all the rebuilding and construction the long term growth could turn positive. Even though the cost of cleaning up the damage done could run into the billions, Japan has a big economy and the impact of this disaster can be absorbed economically by government and private insurance, so the impact will not be as large as it could be.

Jonathan