Fire disrupts work at Lite-On LCD factory in China

Lite-On Technology Corp (光寶科技), the world's fifth-biggest maker of liquid-crystal-display (LCD) PC monitors, said yesterday that a fire at one of its Chinese factories recently had caused NT$2.27 billion (US$71.2 million) in losses, both in equipment and inventory.

Losses will be fully covered by a fire insurance policy with Ping An Insurance (Group) Co of China (中國平安保險公司), including losses stemming from a disruption in production, Lite-On said in a filing to the Taiwan Stock Exchange. The insurer is assessing the fire claim, it said.

Lite-On shares fell by the 7 percent daily limit yesterday, underperforming the benchmark TAIEX index, which dropped 1.57 percent in the first trading session following the six-day Lunar New Year holiday.

"The impact on the first quarter will be limited as we have inventory [to cope with customer demand]. The impact should reflect on revenues during the second quarter," Lite-On spokeswoman Elaine Su (蘇怡任) said yesterday.

The company said that the fire broke out at its factory in Dongguan on Feb. 3 and was caused by a short-circuiting electrical line. No injuries were reported, it said.

The incident disrupted all 14 LCD monitor production lines at the factory, Su said.

LCD monitors made up the biggest portion -- at more than 40 percent -- of Lite-On's overall revenues in past years, Su said.

Lite-On posted record-high revenues of NT$17 billion last year after reporting NT$5.3 billion in revenues in the fourth quarter.

"Lite-On is helping customers obtain supplies from different sources," Su said.

Dell Inc and Hewlett Packard Co are major customers of Lite-On, market researcher DisplaySearch said.

The company intends to resume production of LCD monitors after the insurer has completed its assessment of claim, Lite-On said.

The production lines for LCD TV displays and cathode-ray-tube monitors, which were not damaged in the fire, will soon restart operation, the company said.