An automotive plant will close next year with the loss of about 180 jobs.
The Welsh Government said Kasai would close its operation in Merthyr Tydfil in July 2021, adding it was "very disappointing news".
In February, chief executive of the Welsh Automotive Forum Tim Williams warned the closure of Honda's factory in Swindon would have a "devastating impact" on the supply chain.
Kasai makes internal parts for Honda, Jaguar Land Rover and Nissan.
About 22% of its sales are to Honda.
The company revealed in November that first half-year profits in its European operations were down - along with future forecasts.
In a joint statement, the Labour MP for Merthyr Tydfil and Rhymney Gerald Jones and assembly member Dawn Bowden said: "We are very disappointed to hear this announcement from Kasai, although the news does not come as a total surprise given the position at Honda in Swindon.
"This is the latest in a number of job losses in our constituency, which shows the vital importance of stepping up support and intervention for those businesses which can help to sustain local jobs."
In a statement, the Welsh Government said it had worked with the company since the Honda closure was announced, adding: "This news reinforces the significant changes under way in the automotive industry as a result of new technology and our exit from the EU."
It said it would offer support through its ReAct programme and "continue to do all we can to explore options for the site".