Electronics exporters’ costs up because of Japan woes, says DTI

THE Department of Trade and Industry (DTI) on Tuesday said electronics exporters have complained of rising costs after some suppliers’ facilities shuttered because of the disaster in Japan.

Citing reports from the Semiconductor and Electronics Industries in the Philippines Inc. (Seipi), DTI Secretary Gregory Domingo told reporters that the damage resulting from the earthquake and tsunami that hit Japan two weeks ago caused raw material prices to soar.

Domingo said sourcing of raw materials from, as well as shipments of finished products to Japan both would be affected.

“Our fear is we are not the only ones impacted. The global electronics industry depends on how long plants in Japan are shut down,” the DTI chief said.

Semiconductor and electronics comprise about two-thirds of Philippine merchandise exports, with about a fifth produced by Japanese firms in the country.

In a report, Standard & Poor’s (S&P) said prices of semiconductor and consumer electronics would surge following the disasters that struck Japan.

“It’s a leading source of semiconductor manufacturing equipment, semiconductor memory chips, semiconductor wafers, liquid-crystal displays (LCDs), and consumer electronics. Japan’s key role, combined with likely continuing near-term disruptions in its transportation and electricity networks, could lead to some potential global supply disruptions and pricing volatility,” S&P said.

“Standard & Poor’s believes that the ultimate effect on the high-tech sector will depend on the actual damage sustained by Japanese fabs and semiconductor suppliers, the length of time they remain offline, and the condition of their supporting infrastructure-electricity, roads, and water systems,” the rating firm said.

“Inventory on hand could also serve as a short-term buffer for products such as semiconductor wafers, although in general, we currently view inventories as lean across the manufacturing and distribution channel. End-product manufacturers are also likely to seek alternative suppliers, assuming they’re available,” S&P added. Ben Arnold O. de Vera, Manila Times