High-technology investors in Taiwan are hoping that the government will keep the water taps open, as more restrictive water-rationing measure take effect in Taipei today.
"It would be a suicidal situation if chip producers had to cut production, because their global competitors may step in and take over the market -- which would be hard for local chip producers to regain," said David Loomis, a strategist at Primasia Securities Co.
Many companies in the Hsinchu Science-based Industrial Park (
The central government promised a continuous supply of water by trucking in supplies and drilling new wells. On Monday the National Science Council (
"The losses will be immeasurable if production were cut," said Tzeng Jinnhaw (
The park's administration on Monday nevertheless, vowed that the water level in Hsinchu's Paoshan (寶山) and Yunghe (永和) reservoirs are sufficient to supply water to the park until the end of June.
The government said it would give special priority to the semiconductor, TFT display and the petrochemical industries.
"The water-rationing policy does not appear to have had a direct, immediate impact on Taiwan's semiconductor and TFT-LCD industries because it's a government priority to supply sufficient water to the high value-added industries," said Neal Stovicek, a strategic advisor at National Securities Corp (
If the water shortage worsens, Stovicek said that the high-tech industry will implement contingency measures to boost water sources, including the purchase of water domestically or from abroad.
Major companies in Hsinchu yesterday said that water shortage has not yet affected them.
"There is currently no lack of water," TSMC's Tseng said.
The company is doing all it can to reduce its use of water, including revising production processes in compliance with government policy, he said.
TSMC Chairman Morris Chang (
Officials at United Microelectronics Corp (UMC,
Silicon Integrated Systems Corp (SiS,
A spokeswoman from SiS, who refused to be identified, said that the company has an underground storage tank which offers a five-day back-up water supply.
Silicon previously invested NT$150 billion to build a water-recycling system, which is capable of recycling up to 85 percent of the company's wastewater, she said.
Computer chipset designer VIA Technologies Inc (威盛電子) will not be affected by the drought, VIA spokesman William Lee (李君偉) said yesterday. But he warned that the company's downstream manufacturers, including chip foundries, said they would seek out production lines in Singapore or the US to take over the orders if domestic plants were forced to shut down.
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