Mon, May 02, 2005 - Page 1 News List

Fire at ASE factory in Chungli rages for five hours

By Amber Chung  /  STAFF REPORTER

A fire broke out yesterday afternoon at a building of Advanced Semiconductor Engineering (ASE) Inc's factory in Chungli, Taoyuan County, and was extinguished approximately five hours later. No deaths were reported.

The damage and losses at the world's largest chip packager are still "under assessment," ASE's controller Freddie Liu (劉詩亮) told the Taipei Times by telephone yesterday. But Bobby Lin (林育名), marketing manager, said the losses could be limited as the plant is fully covered against fire damage.

The fire started at 1:47pm at boilers of the factory's Building A and was mostly brought under control by firefighters at about 7pm, the Central News Agency reported.

The Chungli plant, which ASE bought from Motorola Inc along with two South Korean fabs in 1999 for a total price of US$367 million, currently offers integrated circuit packaging, testing and substrate manufacturing with output of 12 million chips a month, the company said on its Web site.

ASE cuts silicon wafers from chipmakers such as Taiwan Semiconductor Manufacturing Co into chips, attaches conductive wiring to the semiconductors and packages them in insulating plastic covers.

The 1-million-square-foot plant reportedly creates NT$5 billion in sales, accounting for over 6 percent of the projected NT$80 billion revenue this year. The company has another factory in Kaohsiung and overseas factories in Korea, Japan, Singapore, Malaysia and the US.

ASE on Thursday reported an unexpected net loss of NT$128 million in the first quarter of this year, down from a profit of NT$1.6 billion a year earlier, owing to falling demand for semiconductors used in personal computers and mobile phones.

ASE's chief financial officer Joseph Tung (董宏思) told investors at the time that the company will cut spending this year to between US$200 million and US$250 million to limit capacity in order to support falling average selling prices.

The fire, however, may change the company's capital expenditure plans and is expected to impact its second-quarter sales, which ASE originally expected to record minimal growth of between 1 percent and 3 percent.

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