Fri, Sep 14, 2001 page17

• High-tech firms hurt by delays

  TIME IS MONEY With aircraft unable to fly to the US -- Taiwan's biggest market -- domestic companies have been forced to warehouse their products since Tuesday

  • By Kevin Chen / STAFF REPORTER
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  High-tech companies located in Hsinchu said NT$250 million worth of exports have piled up in the park's warehouses since the US airports closed Tuesday following terrorist attacks in New York and Washington.

  "As of today [Thursday], more than NT$250 million (US$7.16 million) worth of exports produced by park firms were still in the park's warehouses," said Lu Li-kun (呂理坤), head of the business service division at the Hsinchu Science Park Administration.

  Approximately 277 export items including semiconductor chips, PCs, communications components, motherboards, monitors and opto-electronic products, have been put on hold, according to Lu.

  But he stressed that the amount of stranded products may not fully reflect the impact of the air ban as the warehouses, which are under the management of Taiwan Air Cargo Terminal Logistics Co (華儲), already stopped taking in US-bound cargo at midnight Wednesday as most park firms do not want to pay the extra overnight fees.

  Local media said yesterday, citing statistics compiled by the Taiwan Electrical and Electronic Manufacturers' Association (電電公會), that Taiwan companies on average shipped roughly US$100 million worth of electronic products to the US each day and are bound to face losses up to US$10.14 million due to the suspension of US-bound flights.

  But Lu said that it is still too early to estimate the monetary toll on Taiwan's electronics makers. "They [companies in the park], of course, are worried about the postponed delivery as it means they may have to pay late fees to their customers," Lu said.

  "But they are also concerned -- if air traffic into the US remains suspended, whether it will damage the relationship with customers, and does it foresee possible poor sales in the Christmas season."

  Lu has every reason to worry. The TAIEX electronics index ended down 6.2 percent yesterday at 190.69 on panic selling by investors who fear that the terrorist attacks in the US could cause consumers there to turn conservative, which would cause lower demand and thus delay chances of an economic recovery anytime soon.

  Indeed, as more than 40 percent of the island's electronics exports are destined for the US, the Market Intelligence Center (MIC, 市場情報中心) said it will tentatively revise downward the decline in the production value of Taiwan's information technology sector this year 10 to 15 percent from 8.5 percent estimated earlier, a MIC spokesperson said.

  Companies that would be affected include those making PCs, DRAM chips, motherboards, TFT displays and monitors. The semiconductor industry, for instance, is expected to report a huge decrease in its total production value this year to NT$525.9 billion, contracting by 26.4 percent instead of a 12-percent decline predicted earlier in July, she said.

  For your information

  Waiting game

  * Export products valued at US$250 million have piled up in Hsinchu warehouses since Tuesday. * The stranded export items including semiconductor chips, PCs, communications components, motherboards, monitors and opto-electronic products.
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