11:32 PM
TOKYO |
TOKYO (Reuters) - A shortage of parts will force Sony Corp (6758.T) to cut production or suspend output at five more plants in Japan following the country's catastrophic earthquake this month that has hit the global supply chain.
Global electronics and autos seem to have been most affected by the turmoil, but in an illustration of how the ripples are spreading, global miner Rio Tinto (RIO.L) warned the disruptions posed a threat to its expansion plans.
More than 10 days after a 9.0 magnitude earthquake and 10-meter tsunami struck the northeast of Japan, manufacturers are struggling to get back up to speed as factories grapple with a lack of components, power cuts and damage to infrastructure.
Such is Japan's position in the global supply chain, that companies from Apple Inc (AAPL.O) to General Motors Co (GM.N) and Nokia (NOK1V.HE) are feeling the impact.
Electronics giant Sony said it was considering temporarily moving some production overseas after five more plants, mostly in central and southern Japan, were affected by parts shortages stemming from the disaster.
"If the shortage of parts and materials supplied to these plants continues, we will consider necessary measures, including a temporary shift of production overseas," the company that makes the Playstation games console said in a statement on Tuesday.
The plants make such products as digital and video cameras, televisions and microphones, the company said in a statement.
The disaster now affects 14 of Sony plants in Japan.
TECH CHAIN VULNERABLE
Japan's grip on the global electronics supply chain is causing particular concern.
The country produces around a fifth of the world's computer chips.
It exported 7.2 trillion yen ($91.3 billion) worth of electronic parts last year, research from Mirae Asset Securities shows.
"There are a huge number of little bits of the high-tech food chain which are done nowhere but in Japan," said Sam Perry, senior investment manager of Pictet Japanese Equity Selection Fund. "Nobody else has the quality or the consistency, and in some cases the technology to do it."
Japan dominates with the supply of LCD film and sealants for semiconductors, among other areas, Perry said.
"You simply can't do high-tech without Japan."
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