Sat, Mar 13, 2004 page10

• DuPont to expand production

  SURGING DEMAND The company is struggling to fulfill orders for chemicals used in LCD and circuit-board production, so it is tripling capacity at its factory in Taoyuan

  • By Lisa Wang / STAFF REPORTER
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  DuPont Co, one of the world's largest chemical suppliers, is accelerating expansion plans in Taiwan to keep pace with rising demand for materials used in consumer electronics, a company official said yesterday.

  The US chemical giant said it could accept no more orders for delivery this year of chemicals used in the production of liquid-crystal displays and printed circuit boards, said Diane H. Gulyas, group vice president DuPont's Electronic and Communication Technologies.

  "The global tech recovery just came back faster than we thought ... Now we're rapidly expanding capacity around the world ... But I think the supply will remain tight during the second half of this year," Gulyas told reporters in Taipei.

  She admitted that the spike in demand had resulted in a rise in prices.

  To catch up with the strong demand, DuPont plans to triple the capacity of its factory in Taoyuan, the company's largest plant in the Asia-Pacific region, said Walt Cheng (鄭憲誌), chairman and president of DuPont Taiwan Ltd.

  The annual output of the factory is expected to soar to 3 million tonnes of polyimide film, flexible polyimide laminate and screen printable materials used in the production of computers, cars, displays and bio-medical sensors, according to Cheng.

  The capacity expansion will also extend to Dupont's Chinese plant in Donnguan.

  "We plan to double the output," Cheng said.

  "Even so, we're still uncertain about whether the supply constraints will ease during the second half," Cheng said, because shipments will be capped by the ongoing tight supply of precious metals.

  In addition to the capacity expansion, DuPont yesterday announced it was spending US$20 million to US$30 million over three years on setting up a technical application center in Taoyuan.

  In the first phase, DuPont will hire about 25 to 30 technological researchers, Cheng said.

  The new lab will focus on developing technologies in the areas of displays, semiconductors and alternative energy to keep up with demand from customers who are aggressively expanding their semiconductor and flat-panel operations.

  "We already talked to a lot of Taiwan's display companies to understand their needs, especially when they are expanding to sixth-and seventh-generation plants that produce bigger panels," Gulyas said.

  A DisplaySearch report released in late January said that AU Optronics Corp (友達光電) and its Taiwanese peers are expected to lead equipment spending this year and will account for half of the total US$9.42 billion for the world's thin-film-transistor LCD makers.

  "It's good to see DuPont joining the game as Taiwan's market has long been dominated by Japanese optoelectronic material suppliers such as JSR Corp," commented Aldirich Lai (賴文漢), an analyst with market researcher Topology Research Institute (拓墣產業研究所).

  But it will be a challenge for DuPont to take market share from its Japanese rivals, which have been supplying high-quality electronic and display materials for Taiwan's LCD industry.

  Another unfavorable factor is the timing, he said. DuPont is entering the market just as the boom in the TFT-LCD industry is ending, Lai warned.

  "When business is bad, it's even more unlikely for Taiwanese flat-panel makers to switch suppliers," he said.
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