Ceatec companies feeling the credit crunch

Smaller manufacturers and service providers at the tech gathering say they expect crisis on Wall Street to hit home. Some are already experiencing it.

Erica Ogg Former Staff writer, CNET News
Erica Ogg is a CNET News reporter who covers Apple, HP, Dell, and other PC makers, as well as the consumer electronics industry. She's also one of the hosts of CNET News' Daily Podcast. In her non-work life, she's a history geek, a loyal Dodgers fan, and a mac-and-cheese connoisseur.
Erica Ogg
3 min read

CHIBA, Japan--The world's electronics companies are busy here at Ceatec 2008 showing off some of the contents of their R&D labs, but meanwhile the world financial system is in chaos.

Though the general buzz inside the Makuhari Messe convention center here is generally buoyant, the people and companies here aren't immune to what's happening outside the walls.

Attendees stream toward Ceatec 2008 just outside Tokyo. Erica Ogg/CNET News

Just today as I was reading The Daily Yomiuri on the train ride from Tokyo to the convention center where the show is being held, one of the front page stories caught my attention: "Confidence at Japanese companies falls sharply." The quarterly Bank of Japan survey of businesses' impressions of economic conditions revealed that "major Japanese manufacturers are the gloomiest they've ever been in five years." Japan is the world's second-largest economy, and lowering profit forecasts and a slowdown in capital spending appears to be on the rise here, according to the survey.

While major companies are sure to feel the pressure of a global credit crunch brought on by the failure of several Wall Street banks in the past few weeks, I decided to find out if or how it's affecting smaller regional companies too.

Speaking with Japanese, Korean, and Chinese manufacturers and service providers here revealed that while they're not panicking yet, there's definitely some worry over a lack of credit and the turbulent markets.

Obtaining credit will be harder for Japanese wireless provider E-Mobile in the current environment, said Hiroyuki Yokoyama, an employee in the company's enterprise sales division. "We can't (borrow) money from banks like Goldman Sachs, Morgan Stanley, and UBS" as easily, he said. Yokoyama added that he anticipates the current crisis to be an issue for him and his company for at least the next two years.

Sarah Yoo, who manages overseas marketing for Seoul-based SBNTech, a maker of VoIP video phones, expressed frustration with the financial turbulence.

"The up and down currency is too crazy. We have to buy chips (for our product) from Texas Instruments. It's harder to buy when currency is not stable," she said. Plus, the U.S. is a major market for SBNTech's products, and a depressed economy in there could lead to fewer sales for them.

Still others, like Masashi Sakaoka, a sales manager for mobile phone software maker Multisoup, expressed confidence in Japan's economic system for companies like his employer.

"My company is very small, so the damage is very little," said Sakaoka. He credits Japan's more stable banks as the reason he doesn't have to worry as much.

Of course, not everyone was very talkative. Wang Xuan, of China's Kepo Electronics, maker of alarm security systems, said only that he remained confident in his company's ability to do business in the U.S.--they have an office in Detroit. He did allow that his company is indeed "concerned" about the conditions on Wall Street.

And a research director for Panasonic's advanced technology development labs was happy to talk about his work on 3D imaging, but clammed up when asked about his opinion on the current economic environment.

"I am not familiar with this financial crisis," he said several times.

Don't we all wish we could say the same?

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