Tuesday, March 15, 2011

Japan After Quake

Japan has the world No. 1 largest LED manufacturing Plant Nichia account for 18% of World LED production as the 2010 revenue data told us.

Japan accounts world’s 20% global Semiconductor Production.

Company Headquarters in Japan generated 63.3B in microchips revenues; representing 20.8% of the world wide market.

Japan Produced 10% of world’s DRAM in 2010.

Toshiba accounts 35% of global NAND flash products in terms of Revenues 2010.

Japan Headquarters companies are world No. 3 in Semiconductor production.

Japan is 14% of world total LCD TV panel Production.

More impact to Japan is that the component on the TV LCD Panel such as the Glass, Colour filter , polarizer , CCFL and LED are mostly made in Japan.

Sharp partly shut down their panel manufacturing for LCD TV... and Murata had shut down some of the component manufacturing which would affect the manufacturing at Foxconn for Ipad2!
There are a lot of electronics modules for Automobile is made in Japan and a lot are for export.
Many of the Automobile like Nissan, Toyota, Mazda and Honda has stopped some of their manufacturing due to shortage of Module supplied by their OEMs which were more or less damaged in the Tsunami.

Nissan Stopped Production and loss shipment of 2,300 cars, a loss of $24.5M a day,whereas Toyota for 40,000 cars with daliy loss of $72M, Honda for 16,600 cars a day, that is $14M loss a day just for Honda.

Japanese will not spend money on Luxury goods anymore, or at least less significantly comparing with last week and before.

For those Luxury Goods such as watches Rolex, Patek Philippe, IWC , Japan is one of the biggest market after Hong Kong. I think Japan is the world 2nd largest Export Country after Hong Kong.

Well, I find that these are Japan’s Market share on these big European luxury Brands.
Hermes 21%, Bvlgari 19%, Luis Vitton 8.8%, Coach 36%, Tiffany 19%, Gallaway 18%....

So we can see that these luxury good market will drop significantly for at least I year, they may switch to export more to other Countries like China and Hong Kong in Asia.

Gold may be the item that we can speculate that it can reach $1,700 an ounce soon.

This will trigger world threat in the stock market, especially the Libya situation is still tense and had no way to see when Col. Kaddafi would step down, Hong Kong Index Will drop in the coming weeks… down to 21,000 points…
More important point is more nuclear threat happens in Japan and Most of the people would flee to distant prefecture in Japan or to overseas countries such as Hong Kong, Singapore and Philippines.

I am thinking that it would be a great impact to Japan and World’s Economy and it may take at least 12 months to recover… Provided there is no more serious Earth Quake happens anymore

Further more, it triggers more safety measurement for plan of Nuclear Plant building.

It forces Japan Company to diversify their manufacturing facilities in overseas countries such as the Philippines, Thailand and Malaysia.
In Short the Stock In Tokyo, Singapore and Hong Kong will keep on falling. But this is only over-sensitiveness of the investors, in mid term starting August, the stock like iron ore, cement and steel in China will have tremendous momentum to gain as to support Japan on re-construction.
The foreign companies would not consider to put all egg in one bucket and to consider in future the headquarters not in Japan... may be better in Hong Kong or Singapore.
HK Snob

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