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Taiwan Semiconductor Manufacturing Co. {TSM}
says it has received commitments from local authorities pledging
that 85 percent of its electrical power will be restored by
this weekend, according to a statement released by the company.
The company posted revenue of $923.3 million for the six months
ended June 30, making it the country's largest semiconductor
manufacturer. Philips Electronics owns 28 percent of the company.
Taiwan Semiconductor's stock price took an immediate hit after
Tuesday's earthquake, which measured 7.6 on the Richter scale.
The temblor knocked the company's manufacturing facility in
Taiwan's Hsinchu Science Park entirely offline.
Like most other major Taiwanese high-tech manufacturers, Taiwan
Semiconductor's emergency generators kicked in immediately after
the quake, company officials say, which allowed an orderly shutdown
of plant operations and minimized damage to the company's expensive
semiconductor-manufacturing equipment.
Company officials say they're currently operating with electricity
at about 25 percent of normal levels. By rotating the available
power from machine to machine, Taiwan Semiconductor workers
have been able to begin the necessary task of checking and recalibrating
highly sensitive manufacturing equipment, prior to resuming
full operations.
"With our own generator power as a supplement, this is
adequate to get us up and running," says Ron Norris, Taiwan
Semiconductor senior vice president of worldwide marketing and
sales. Nonetheless, company spokesperson Y.C. Huang says the
company's operations in the fourth quarter will be "substantially
affected" by the quake.
The selloff in Taiwan Semiconductor's stock is taking place,
despite escalating demand for the products produced by the company
and other Taiwanese foundries which, taken together, account
for about 12 percent of the world's supply of computer chips.
Overall, 1999 was projected to be a banner year for Taiwanese
chip makers. Product revenue is projected to grow by 44.8 percent
this year to nearly $4.2 billion, according to the Taiwan-based
Industrial Technology and Research Institute.
It's still not clear how much that projected growth might be
affected by the recent quake.
"It's really too early to tell," says John Hatch,
spokesman for the American Electronics Association, based in
San Jose, Calif. "A lot of our [member] companies source
products in Taiwan so the level of concern is relatively high."
Hatch says Taiwan Semiconductor's statement about the resumption
of operations is "an encouraging sign" but that it
will be another week or so before the full impact of the quake
can be assessed.
"We're going to stay tuned in," he says. "We
should have a better feel for it soon."
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