Massive Japanese Earthquake May Affect Taiwanese Supply Chains

Taipei, March 14, 2011 (CENS)--With only three listed Taiwanese firms having invested in Japan, the impact of the Japanese earthquake on Taiwan is limited so far, but the influence on some local supply chains remains to be seen, due to their reliance on the supply of Japanese key components and parts, reported Vice Premier Sean Chen yesterday (March 13).

Edward K.M. Chen, chairman of state-run Taiwan Power Co., Ltd., reported that different from the exploded Fukushima nuclear power plant, nuclear plants in Taiwan have 40,000 metric tons of reserve water for emergent cooling-down and complete back-up power generation system. In addition, Taipower can also emulate the Japanese practice abandoning the nuclear-power generation units by using seawater for cooling-down, so as to protect the lives of local people.

The two officials made the remarks during a meeting of the National Security Council, convened by President Ma Ying-jeou, to review Taiwan's responding capacity in the face of plural disasters brought about by such strong earthquake as that in Japan.

Hung Chung-chiu, vice economics minister, pointed that three listed companies have invested in Japan, including AU Optronics, United Microelectronics, and ASE Inc. AUO has acquired two plants for producing poly-silicon materials, for use in solar cells, in the tsunami-inflicted areas of Miyagi and Fukushima prefectures. UMC's plant in Chiba-ken has been partially damaged but the influence on UMC should be limited, since it has only 20,000 wafers of monthly output, or 3-5% of its total sales. ASE's plant in Yamagata remained largely intact, although it has suspended production, due to power outage.

Huang noted the earthquake may affect the supply of some key IT industrial materials to Taiwan, such as ACF for drive IC and silicon wafers. SUMCO, which accounts for 50% of global silicon wafer supply, suffers certain damages on some production lines.