The natural and man-made disasters in Japan are set to cause global disruption across the electronics industry.
Firefighters at the scene of the devastation following the earthquake, tsunami and the nuclear reactor crisis at Fukushima described it as "apocalyptic". Some analysts now estimate the insurance industry's final bill could reach US$35 billion (Dh128.55bn), excluding any impact from problems at the nuclear power plants. Meanwhile, IT and electronics manufacturers face massive potential shortfalls in the supply of vital industry components.
Not only are manufacturers such as Canon directly affected, but a shortage of components such as semiconductors is already reported to be disrupting production schedules in the worldwide technology industry, affecting companies such as Nokia. The research company IHS iSuppli reports that Japan accounts for 14 per cent of the global production of computers, consumer electronics and communications gear.
Masahiro Shibano, a Citigroup analyst, says the biggest negative impact of the disasters will be in semiconductor materials. The prospect of extended supply disruption is already reported to have pushed prices for key technology parts higher. If the supply chain is broken even for a few weeks, the impact globally is likely to mean higher prices combined with shortages of tablets, smartphones and computers. Some shortages are already expected to last for months.
"Nikon, Tokyo Electron, Canon, Ricoh and others have confirmed some direct damage and we expect other makers to be affected indirectly," Mr Shibano says. "Stocks we think will attract buying are Fujifilm, as it has been sold down and has only suffered minor direct damage, and Canon, which we like as quality name."
But while some manufacturers are trying to keep their problems under wraps, Canon admits to ongoing production problems.
"With regard to Canon offices, plants and Canon Group companies in Japan, there have been reports from several sites of power outages, damage to buildings and stoppages in production equipment … Damage was significant at Canon's Utsunomiya Office and Fukushima Canon," the company says.
The damage to the Japanese electronics industry has been extensive, says Mr Shibano. "All companies have suffered damage to key production bases except for Mitsubishi Electric, whose facilities are mainly located in western Japan … Some equipment has been idled at Toshiba."
The smartphone maker Nokia has also begun to evaluate the impact of the tragic events in Japan on its global operations.
"Although a complete picture is not available, Nokia expects some disruption to the ability of its devices and services unit to supply a number of products due to the currently anticipated industry-wide shortage of relevant components and raw materials sourced from Japan," says the Finnish company.
But the full impact on manufacturers' revenues worldwide will not be revealed immediately.
Nokia does not expect any material impact on its first quarter results for this year because of the Japanese disaster, but plans to reveal more detailed information when it reports the year's first quarterly figures. Meanwhile, the company says it is continuing to work with suppliers inside and outside Japan to try to minimise the disaster's impact.
Citigroup believes the damage is now extending right across the consumer electronics and components industries, although damage may be limited in some cases.
"Damage to the plant and equipment in these sectors has been limited. Interest centres on how quickly power supply can be restored," Mr Shibano says.
There are also reports that production may be disrupted well beyond the disaster area itself. The camera maker Nikon has admitted that the suspension of its precision equipment plants in north Japan could potentially disrupt production at factories closer to Tokyo, where assembly lines may soon run out of parts. Nikon's factories in the Tokyo region may also be affected by rolling power blackouts, expected to be in force by the end of next month. Disruption to power, caused by the earthquake and now made worse by the nuclear crisis, is also likely to cause an interruption to production that is more severe than was originally anticipated.
The total cost of the disaster is hard to estimate. So far, most insurers and re-insurers say it is too early to be sure what they will have to pay to policyholders.
But Swiss Re puts its own costs at $1.2bn and AIG, the US insurance giant, is reported to have said its claims from the disaster would be at least $700 million.
The full extent of the damage suffered by the global IT and consumer electronics industries has yet to be fully evaluated.
However, component shortages resulting from the disaster are expected not only to disrupt supplies of consumer gadgets for months to come, but also to adversely affect manufacturers' revenues for this year.