Disruption in the supply chain has become both a buzzword and a reality for many. Not in Japan. Due to a mix of factors ranging from island mentality to conservatism, Japan has been both late and slow on globalization and has kept onshore most of its high-quality supply chain. 

Poor management led some jewels to be sold to foreign companies. This happened to Elpida and its flagship Hiroshima semi-conductor plant acquired by US company Micron after they filed for bankruptcy in 2013. This ended up being a blessing for the Japanese manufacturing base. According to Nikkei Asia, Micron has invested $7 billion in Japan in the last three years. For Micron, merits of investing in Japan range from the pool of talents around Hiroshima to the wide and integrated eco-system of suppliers of semi-conductor materials and manufacturing equipment.

Sumco, a leading manufacturer of silicon wafers for chips is planning to raise prices by 30% in the next two years and to invest $2.6 billion in new capacity in Japan and in Taiwan. Tokyo Electron the global second largest manufacturer of semi-conductor equipment seems confident in the future and happy at home where it plans to invest another $7billion in Research & Development in the next five years. 

Similar trends can be seen in different areas such as aerospace materials and engines. Toray, the largest global manufacturer of high-performance carbon fiber for aircraft is back in record profit, having registered a loss last year. Teijin, the second largest carbon fiber maker plans capacity increases of 20% this year and 40% next year. IHI, an engine supplier to Airbus, expects a 36% order rise this year. 

Rising orders, strengthened pricing power, higher profits, higher capex. In Japan, the supply chain disruption is not a problem. It is an opportunity.