Thai Flooding Crisis Makes Contract Orders Diverted to Taiwan

Taipei, Nov. 3, 2011 (CENS)--The recent flooding crisis in Thailand has forced global enterprises to switch their contract orders to Taiwan, benefiting local manufacturers in industries of LEDs, auto parts, flexible printed circuits and machine tools.

Facing the worst floods in the past five decades, the Thai government has cut its 2011 economic growth projection to only 2.6% from 4.1% set earlier, acknowledging that the catastrophe is likely to paralyze part of local supply chains for six months to one year. This has prompted global enterprises to switch to Taiwan their contract orders originally going to Thailand.

The trend has been confirmed by a Taiwanese LED manufacturer, Unity Opto Technology Co. The company noted that has received orders for LED components transferred by Avago Technologies, a globally large-sized supplier of analog interface components for electronic devices, as the customer's supply chain in Thailand has been dampened by the floods.

Unity Opto's chairman C.H Wu said that the diverted contract orders will no longer go back to Thai manufacturers, helping his company to consolidate business connections with Avago Technologies in the years to come.

In addition to LEDs, institutional investors stated that Taiwanese manufacturers of flexible printed circuits, including Career Technology Co. and Ichia Technology Inc. , will also benefit from the Thai floods. For reasons, the Japan-based FPC supplier Mektec Corp. has announced a factory shutdown in Thailand, and will surely increase its orders with Taiwanese companies, especially those having already become part of the Japanese customer's supply chain since the Japan 311 earthquake.

To restore their production lines damaged by floods in Thailand, Japanese suppliers of auto parts and machine tools have also planned to either outsource production to or procure new manufacturing equipment from Taiwan recently, noted industry insiders.

Besides, institutional investors also pointed out that such large-sized automakers in Taiwan as Yulon Motor, China Motors, and Yulon Nissan Motor, are also likely to see influx of transferred contract orders from Japanese automakers due to the Thai floods.