Business

Quake Triggered Big Drop in Japan's IT Exports Last Month

Japanese high-tech exports dropped sharply last month as a result of disruption caused by the massive earthquake and tsunami that hit the country on March 11, according to government trade statistics published Wednesday.

The earthquake halted production for several days or more at major high-tech manufacturers across a large part of eastern Japan. Electricity supply shortages and problems obtaining raw materials and parts have caused knock-on effects that mean some factories are yet to resume full production.

A handful of manufacturing plants were more heavily damaged and won't be able to resume production for several months.

Exports of computers by value fell 19 percent on the same month of 2010 and those of computer parts were down 16 percent, Japan's Ministry of Finance said in its provisional figures for March.

The consumer electronics industry also saw a big drop with video recorder exports, down 23 percent by value, and audio apparatus, down 31 percent. In the telecommunications sector, telephony and telecom equipment exports fell 17 percent.

One of the most heavily damaged factories was Sony's Sendai plant, which makes blank media including Blu-ray Discs and professional-use video tapes. It was inundated by the tsunami and remains closed. The effects of this are partly reflected in the export figures for blank recording media, which show a 31 percent drop during March compared to the same month last year.

Japan's semiconductor industry was also hit and several factories have yet to resume full production. Chip exports dropped 9 percent, according to the figures.

In total, the country's exports in March were down 2.2 percent to ¥5.87 trillion (US$71 billion). It was the first drop in exports for 16 months.

The Ministry of Finance data measures the yen value of goods leaving Japanese ports. Exports were hit not just by the direct impact of the quake on factories, but also by disruption to the country's efficient distribution system and supply chain. Many roads and ports were closed for days after the March 11 disaster.

The drop in exports could mean temporary shortages of some products.

Sony Ericsson said Tuesday that supply of flagship smartphones would be affected because it had trouble procuring some parts. Earlier the same day, Toshiba revised down its full-year sales forecast by 3 percent due to the impact of the disaster on its business and consumer spending in Japan.

Many companies are due to detail the effects of the disaster on their business as they announce quarterly earnings over the next few weeks.

Martyn Williams covers Japan and general technology breaking news for The IDG News Service. Follow Martyn on Twitter at @martyn_williams. Martyn's e-mail address is martyn_williams@idg.com

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