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There are few words that can describe the horror the people of Japan are experiencing. The human toll has been high. Mainstream media has been discussing the human tragedy and has just recently begun discussing the economic impact on Japan and the world.

Japan was and still is an ultramodern society and has been a technological leader in the computing and telecom industries for the last 25 years. Japan is a major supplier of chips in the global marketplace. Japan is a linchpin in the electronics industry.

According to news reports, Japan’s semiconductor fabrication facilities have been largely undamaged by the quake and tsunami. However, to calculate the earthquake and tsunami damage to economy of japan goes way beyond a calculation of property damage. There is the tragic loss of life, damage to the country’s transportation infrastructure, which includes water distribution facilities, sewage facilities, roadways, transportation hubs, and fuel oil facilities. Japan’s electrical power generation and distribution facilities have suffered enormous damage. As I write this three of Japan’s nuclear power plant shave suffered significant damage; at the time of this writing, we may be looking at one or more nuclear power plant meltdowns. The impact on the Japanese nation if the nuclear power situation will be bad but not necessarily devastating. Before investors decide to abandon all hope; let’s give the Japanese time and room to deal with the situation.

Based on current reports, none of the country’ chip manufacturers have reported any significant damage. According to Toshiba’s US offices, their facilities in Japan have not suffered appreciable damage. Toshiba’s manufacturing facilities are 200 miles south of Tokyo; hence, Toshiba’s facilities were left largely untouched by the earthquake and tsunami. However, for now Japan’s chip suppliers will be seeing major disruptions in their ability to ship and transport their products. For now as I write this Japan’s priority lies in getting emergency aid into the country. At some point Japan will need to begin focusing on doing business. As horrendous a statement this may sound, the reality is that the nation’s economy will need to become a priority.

If the electronics industry begins seeing such shortages, there are two questions that need to be asked: How long could Japan’s ability to supply chips be hindered? Can Japan’s suppliers be replaced in the short-term and long-term? These are questions that most people do not want to ask at this time but these are questions that need answers at some point.

The current situation could lead to a negative impact on the global electronics industry. This negative impact will result in chip shortages, which will have a domino effect on all products and equipment that use semiconductor chips.

There does not appear to be any way to avoid a short-term and massive shortage in semiconductor chips. In the meantime, companies like GlobalFoundries, Taiwan Semiconductor Manufacturing, and X-Fab Silicon, can work to pick up the slack; even then do not expect an overnight response.

Will Japan’s chip industry comeback? As long as a disruption in the delivery process is the only significant impact on the chip industry, the answer is Yes.