Dark days ahead for component makers

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The chips will stay down for the tech industry until at least the end of 2009, say component suppliers.

According to the Financial Times, Japanese component makers TDK, Nichicon, Kyocera and Murata Manufacturing say high-end components are staying on shelves, which is putting enormous amounts of pressure on bits and bobs like capacitors and inductors.

The worst news is for the mobile makers, but PC makers like Dell – whose shares are already taking a hearty thrashing – and consumer electronic giants like Panasonic and Sony will also be feeling the pain.

In fact, the only thing currently keeping shipment volumes from sinking like the Titanic is the incessant demand for basic products in emerging markets like India and China.

Murata has purportedly predicted a whopping 40 per cent drop in its net profits, even if it manages a 1.3 per cent rise in sales. Taiyo Yuden reckons it can expect a 44 per cent slump in net profit as well as a fall in sales.

TDK is estimating its sales will stay flat, but is preparing itself for a 22 per cent drop in net income.

But despite all the doom and gloom, all the Japanese component groups say they are still optimistic about staying profitable, thanks to a 'strong technology base and diversified clientele'.
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