For decades, a handful of companies overwhelmingly dominated post-war Japan's industrial, manufacturing and electronics landscape, helping to turn the devastated country into the world's second largest economy and making it a respected competitor in the international electronics market.

A new economic landscape is emerging in Japan, however, significantly altering and reducing the role played by the country's leading companies, especially the network of banks, financial institutions, manufacturers and high-tech businesses—otherwise known locally as Keiretsu—that drove its post-war expansion.

Only a few years after emerging from a decade-long slump, Japan's economy is again weakening and its high-tech giants are scrambling to accelerate a much needed reorganization operations and reposition themselves for growth in a worsening global market.

Industry sources said these companies might have no options but to refocus on more profitable and stable industrial and heavy machinery businesses and merge the more challenging electronics businesses with local rivals to ensure survival.

Precipitated by years of stagnation in key industry segments, competition from overseas rivals, the emergence of China as a low-cost manufacturing center, and more recently, the global economic turbulence that started in the U.S. real estate and financial sectors, Japan's latest remake of its economy is proving more difficult than the first round, according to industry observers.

In the high-tech sector, Fujitsu, Hitachi, NEC, Mitsubishi and Toshiba appear headed for a dramatic make-over, which analysts expect would result in these once-vertically integrated companies divesting once-core semiconductor, IT and other technology-intensive operations to refocus on higher-margin, less cyclical and less capital intensive businesses.

Over the next years analysts said they expect Japan's five biggest electronic companies to exit businesses which they once dominated internationally with consolidation occurring in product areas like semiconductor, hard disk drive, system LSI, memory and mobile devices, all of which have "erratic cash flows due to their volatile profitability," according to Hiroki Shibata, an analyst at Standard & Poor's in Tokyo.

"The companies focusing on these businesses will need to implement further structural reforms," Shibata added.

The expected reorganization started more than five years ago and even up to 10 years in the case of companies like NEC Corp. but the actions will likely accelerate even faster over the next few years due to pressures from shareholders.

While almost all segments of Japan's economy are having major structural problems, according to economists and industry analysts, the business realignment now taking place throughout the country will likely have significant impact on the electronics sector, they said.