This report describes a metaphor - "Galapagos-ization" - used in Japan to describe how its electronics firms, which often succeed in exercising technical leadership, fail to catch the wave of emerging global standards, protocols, and technologies, and find themselves isolated in the idiosyncratic Japanese market as a result. It then outlines the current financial status of Japanese electronics firms, with emphasis on the situation of semiconductor makers and cellular handset suppliers. Finally, it summarizes the effect of the global economic turmoil on these critical technology sectors and discusses what moves the companies are making to survive and to re-invent themselves.