IEK: Taiwanese Industries to Suffer From Japanese Earthquake

Taipei, March 16, 2011 (CENS)--Several industries in Taiwan, including display panel, semiconductor, machinery and solar cell, will suffer from the 9.0-magnitude earthquake and tsunami that ravaged northeastern Japan on March 11, according to Industrial Economics & Knowledge Center (IEK), a government-funded market study unit.

IEK's latest report indicates that the catastrophe has forced Japanese firms to temporarily shut down production lines in the devastated area, and this will lead to a decrease in the supply of raw materials and key parts demanded by the said local industries for a while.

For instance, Taiwanese display panel makers are very likely to be plagued by shrinking supply of ACFs (anisotropic conductive films), a raw material for attaching driver ICs to display panel modules, should Japan's Hitachi Chemical Co., Ltd., which supplies over 50% of global demand for ACFs, close its production lines in Ibaraki Ken due to the earthquake.

IEK analysts also pointed out that the PCB industry is also anxious about the earthquake hitting Ibaraki Ken, primarily because Japan's major suppliers of electro-deposited copper foils and rolled copper foils, such as JX Nippon Mining & Metals Corporation and Hitachi Cable Ltd., all have factories located in the area.

As Japanese manufacturers of silicon wafers, including Sumco Corp. and Shin-Etsu Chemical Co., Ltd., have also seen their production and material supply paralyzed by the quake, Taiwanese producers of semiconductors and solar cells, who source the key material largely from Japan, must try to turn to non-Japanese suppliers as Wacker and MEMC to ensure stable supply for the future, noted IEK analysts.

Coincidentally, Taiwanese firms in the optoelectronic and related industries will also have to cope with the tough time when Japan's Nikon and Canon reduce production of exposure machines due to the earthquake, while machine tool makers will be forced to turn to their plan B when their Japanese suppliers of bearings, controllers and lead screws suspend production, IEK analysts noted.