Local printed circuit board (PCB) manufacturers are worried that power cuts in China will reduce factory utilization and throttle revenue growth as the industry enters its peak season, the Taiwan Printed Circuit Association (台灣電路板協會) said yesterday.
The warning came as association members expect to be affected by power rationing in China, which has ordered factories to halt operations for seven to 10 days.
Apple Inc supplier Unimicron Technology Corp (欣興電子) on Monday said that its factories in Suzhou and Kunshan in Jiangsu Province were told to stop production from midday on Sunday through tomorrow.
Photo: Reuters
The two cities are manufacturing hubs for Taiwanese PCB makers and face the most stringent electricity curbs.
“It is challenging for PCB suppliers to allocate manufacturing activities, as the industry is entering the peak season, with demand surging ahead of the Christmas shopping season in the US and Europe, and Lunar New Year gift buying China,” the association said.
Some association members plan to ask employees to start a long vacation before China’s National Day holiday on Friday, it said.
Others have proposed cutting utilization to cope with the energy crunch, it said.
Some PCB firms are also in talks with customers to reschedule shipments or to deliver from manufacturing sites outside of China, the association said.
Its members are also concerned about a potential shortage of raw materials and chemicals if upstream suppliers are affected by the power cuts, it said.
That could lead to a decline in factory utilization, it added.
PCB manufacturers are closely watching whether the power crunch would extend into next month and whether the Chinese government would further tighten energy use, it said.
Longer blackouts and stricter rules would threaten PCB companies’ factory utilization and revenue growth, it said.
China is a major production site for Taiwanese multilayer PCB manufacturers, accounting for 37.3 percent of their combined production, association data showed.
Flexible PCBs are next at 26.7 percent, followed by high-density interconnected boards at 19.1 percent, the data showed.
In Taipei trading yesterday, PCB stocks continued to be affected, with Unimicron Technology closing down 0.72 percent at NT$137, Tripod Technology Corp (健鼎科技) falling 1.71 percent to NT$115 and Compeq Manufacturing Co (華通電腦) dropping 1.57 percent to NT$37.6.
That compared with a 1.28 percent decline in the electronic components subindex and the TAIEX’s 0.76 percent loss.
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