Japanese electronics firms grapple with quake's effects

The 8.9-magnitude earthquake that struck the country today is affecting the operations of companies including consumer electronics giant Sony.

Beyond the widespread damage and loss of life, the earthquake and tsunamis that hit Japan today are having an effect on technology and electronics companies in the country.

Japan plays a central role in the high-tech and consumer electronics industries, home to heavyweights such as Sony, Toshiba, and Nintendo. Many U.S. and European tech companies also have significant offices and operations in Japan. Overall, Japanese factories produced $216 billion worth of electronics last year, according to market analysis firm IHS iSuppli. That includes 16.5 percent of worldwide consumer electronics factory revenue.

All those companies are still in the earliest stages of assessing their status in the initial hours after the magnitude 8.9 earthquake struck.

Sony has stopped operations at six of its factories in the Tohoku region of northeastern Japan. All employees at the affected factories have since been evacuated. The factories affected produce magnetic tapes, Blu-ray Discs and devices, lasers for Blu-ray players, and lithium ion batteries, Sony told CNET.

Sony reports all employees are safe and have been evacuated, but one factory in Miyagi prefecture, near the epicenter, was flooded on the ground floor after being hit by the tsunami.

Panasonic maintains facilities near the quake's hardest hit areas and a company representative reports that a few employees sustained minor injuries when a ceiling collapsed, but damage to factories was minimal. Panasonic is still in the the process of surveying the total damage to its factories and production. But Tokyo-based Canon told Bloomberg that it didn't suffer damage to its plants that would force it to stop output.

Canon U.S.A. also sent CNET a statement from its president and CEO, Joe Adachi, with further details:

"Our thoughts and prayers go out to everyone affected by the earthquake and tsunami in Japan. This is a terrible tragedy, and we extend our heartfelt condolences to those who have lost loved ones. We remain in close contact with Canon Inc., which is based in Tokyo, approximately 200 miles from the epicenter. At this time, preliminary reports are that there have been a limited amount of injuries at our Utsunomiya Office, located in Tochigi prefecture, and there has been a limited amount of damage to our facilities. Our colleagues and extended families in Japan are very much in our thoughts and we will support them in any way that we can."

Not far away across the Sea of Japan, Korean consumer electronics giant Samsung appears to have escaped serious damage, with Bloomberg reporting that the company expects minimal impact on its production following a quick shutdown earlier to avoid any malfunctions.

A representative for Tokyo-based Fujitsu told CNET that as of 6 p.m. Japan Standard Time, the company had received no reports of any injuries to employees. Some of Fujitsu's buildings in Japan suffered slight damage as well as power outages, but the company is still confirming if the damage has affected any of its regular business operations.

Sanyo, Sharp, and Mitsubishi are also said to have been hit by major shutdowns and disruptions to their operations, according to the Smarthouse Web site. Sharp's new LED display factory in Sakai, which was built to withstand earthquakes, automatically shut down when the first shocks were felt.

A Hewlett-Packard representative sent CNET the following statement on the status of HP's operations in Japan:

"The safety of our employees, their families, and their personal property is our first priority at this time. HP is also working closely with its customers and partners to ensure minimal disruption to their business operations."

Microsoft, which also has operations in Japan, issued the following statement, sent to CNET:

"We are saddened by the devastation caused by the earthquake in Japan. Microsoft has activated its Disaster Response team and is currently accounting for all our employees. Microsoft is also reaching out to local government, inter-government, and non-government agencies to support relief efforts.

One area of the electronics supply chain that could be hit particularly hard is chips . Japan accounts for more than 20 percent of the world's semiconductor supply, according to IHS iSuppli. The firm says the major impact on Japan's semiconductor production will be disruption to the supply chain that could be revealed over the next two weeks. "Suppliers are likely to encounter difficulties in getting raw materials supplied and distributed and shipping products out," according to the report released Friday.

We've reached out directly to these and other companies with headquarters or operations in Japan and are awaiting further word.

Updated at 7:20 a.m. PT with news on Canon and HP.

Updated at 8:30 a.m. PT with news from Fujitsu and Microsoft and again at 10:20 a.m. PT with statement from Canon U.S.A.

Updated at 1:15 p.m. PT with info from Panasonic and context about electronics industry.

CNET's Erica Ogg contributed to this story.

 

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