Advanced Semiconductor Engineering Inc (ASE, 日月光半導體) said yesterday that the fire which broke out on Sunday at its factory in Chungli, Taoyuan County, caused damage amounting to at least NT$4 billion (US$130 million), according to initial estimates.
This figure includes only part of the equipment, facilities and goods that were seriously damaged in the blaze, said Freddie Liu (劉思亮), a financial executive of ASE, the world's largest provider of chip-testing and packaging services.
"So far, that's the damage that we could confirm. We are still evaluating the damage in other parts of the plant," Liu said, adding that the company's insurance policy should cover most of the damage.
Liu said that most of the company's customers supported an intermediate arrangement to provide chip-testing and packaging services at a plant in Kaohsiung.
He said it was uncertain when the factory would be able to resume operations.
The Chungli factory makes up about 10 percent of ASE's total capacity, the company said.
"The damage has exceeded my expectations. The situation is much worse than I thought," said George Wu (
Nonetheless, he estimated the loss at under NT$3 billion.
The factory provided services for ASE's major customers, including Freescale Semiconductor Inc, a chip spin-off of Motorola Inc, and Nvidia Corp, the world's top supplier of graphics and digital media processors, Wu said.
The fire is expected to weigh heavily weigh on ASE's share price today. The stock market was closed for a public holiday yesterday.
ASE's shares have slid about 13 percent since the beginning of the year, closing at NT$20.80 on the Taiwan Stock Exchange last Friday.
Another concern is how soon the factory would be able to resume operation so as to minimize the impact of losing orders to local rivals like Siliconware Precision Industries Co (
"It will be unavoidable to see orders diminish in the short term, but the actual impact of the blaze will depend on when the factory can restart operations," Wu said.
Another analyst, who requested not to be named, said the fire would take a toll on the company's second-quarter results, and might affect the bottom line for the whole year.
The analyst said he had expected the company to return to profitability during the quarter ending June as the semiconductor industry improves, but that he was less sure of this after the fire.
Last week, ASE told investors that it hopes to turn a profit in the current quarter after posting a loss of NT$128 million, or NT$0.03 a share, in the previous quarter as a result of sagging demand in the computer and communications sectors.
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