ELECTRONICS
Risks and Crisis Issues for
International Corporations in the Electronics
Sector – BRICS Countries
The electronics sector in BRICS countries is increasingly critical to global supply chains and domestic tech development. These markets offer strong demand for consumer electronics, industrial components, and semiconductors, alongside government-backed initiatives to attract manufacturing and innovation. However, international corporations face major hurdles, including protectionist industrial policies, unclear import/export regulations, and intellectual property vulnerabilities. BRICS nations—particularly China and India—are leveraging the sector for strategic autonomy, often favoring domestic firms through subsidies, localization mandates, and tech transfer requirements.
Over the past five years, the risk landscape has been shaped by geopolitical tensions and supply chain realignments. China’s electronics manufacturing has remained dominant, but rising U.S.-China trade restrictions and local data security laws have pressured foreign firms like Apple, which has begun shifting production to India. India’s Production Linked Incentive (PLI) scheme attracted investments from Samsung and Foxconn, but regulatory friction and bureaucratic delays have slowed delivery. Brazil’s consumer electronics sector has seen growth, though high import tariffs and volatile exchange rates continue to raise costs. Russia's electronics industry was severely disrupted post-2022 due to Western sanctions, leaving foreign firms with stranded assets or barred from exporting sensitive components. South Africa, while smaller, struggles with energy shortages and logistics challenges, affecting electronics assembly and distribution.
Beyond market access, operational risks are mounting. Global chip shortages, cyber vulnerabilities, and ESG concerns over mineral sourcing (e.g., rare earths, cobalt) complicate BRICS-based electronics production. At the same time, governments are tightening local content rules and digital compliance standards, increasing cost and compliance burdens for foreign entrants. Success in these markets demands supply chain agility, IP risk mitigation strategies, and robust political risk forecasting.
5 Key Risks
to Consider before Entering BRICS Electronics Markets:
1. Localization and Tech Transfer Risk – Pressure to manufacture locally or share proprietary technology as a condition for market access. 2. Trade and Tariff Risk – Exposure to high import duties, shifting export restrictions, and retaliatory trade policies.
3. Geopolitical and Sanctions Exposure – Risk of component bans, dual-use technology controls, or exclusion from key markets.
4. Intellectual Property and Counterfeiting Risk – Weak enforcement environments increase the threat of design theft and gray market distribution.
5. Supply Chain and Infrastructure Risk – Vulnerability to power outages, port congestion, and semiconductor shortages impacting production flow.
TO GO FURTHER
CRISIS MANAGEMENT
Know-How, Tools & Resources for Crisis Resolution
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Crisis Assessment & Source Identification
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Crisis Management Coordination
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Crisis Containment & Damage Control
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Crisis Communication & Media Kit
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Crisis Cell Infrastructure
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Crisis Simulation Training [New]
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Business Recovery Plan & 361° Review