Fri, May 13, 2011 - Page 11 News List

Drought may have limited impact on high-tech sector

Staff Writer, with CNA

With water rationing for industry looming, Topology Research Institute (拓墣產業研究所) said yesterday that it should have only a limited impact on Taiwan’s semiconductor and display sectors in the current quarter.

Topology vice president Simon Yang (楊勝帆) said that the industry has built up additional inventory because of slow demand for electronic products during the first quarter.

“These inventories will make up the possible production deficiency caused by the water rationing, so the impact of the output value of big industrial users like PCB [printed circuit board] manufacturers will be under 5 percent in the second quarter,” he said.

The Ministry of Economic Affairs said on Wednesday that if the drought continues for two more weeks, a second phase of water rationing would be implemented in western Taiwan.

In the second stage, water for non-urgent purposes, such as street cleaning, will be halted. Water for swimming pools, car washes and saunas, as well as supplies to big users, would be cut by 20 percent. Industrial users will see cuts of 5 percent.

If the drought persists until the end of next month, the water supply to different zones will be rotated, which will be the third phase of water rationing, the ministry said.

In that happens, Yang said the impact on the output value of the semiconductor and display sectors would worsen by to up to 10 percent in the third quarter, which is traditionally a busy season for consumer electronics sector.

“Taiwanese upstream makers will find it difficult to meet the demand of downstream customers if the water shortage lasts to June or July, which will give rivals in other countries, like Samsung Electronics Co, an easier opening to raise their market share,” Yang said.

The plum rain season usually begins on May 1 and lasts until the end of June, but the Central Weather Bureau said the rains would arrive late this year.

The Water Resources Agency has said the water levels in four reservoirs in northern Taiwan have dropped to near-alarming levels.

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