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Taiwan's financial markets were shut by the earthquake on Tuesday. Power lines were cut and main roads severely damaged by the quake and its more than 1,000 aftershocks.
But the major ports and air terminals, the export economy's links to global buyers, reported they were operating as normal, and the commodities trade said it was little affected.
Industry leaders in the island's key petrochemical and semiconductor sectors reported no damage to capital equipment, but the power cuts forced plants to halt production.
ELECTRONICS KEY CONCERN
Electronics make up about 30-35 percent of Taiwan's exports, which totaled around $111 billion in 1998, and analysts were especially concerned about the quake's effect on that sector.
''The reports that we're getting suggest that damage to fixed capital is probably not excessive. Nonetheless with respect to the semiconductor industry, power outages and excessive vibration can cause substantial losses in work in progress,'' said Duncan Wooldridge, a senior economist at Merrill Lynch, Hong Kong.
Top chipmakers Taiwan Semiconductor Manufacturing Co and United Microelectronics Corp. said output would be affected by loss of power.
Taiwan Semiconductor said in a statement the company would make a fuller assessment of the quake's impact on wafer production when electricity returned to its plant at the Hsinchu Science Park in northeastern Taiwan.
State television estimated losses of T$500 million (US$157 million) for the cluster of high-tech companies based in the park.
SUBSTANTIAL LOSSES IN SHORT TERM
''Whether or not these companies are able to gear up production over the next couple of weeks, there's still going to be a substantial loss over the short term,'' Wooldridge told Reuters Television in an interview.
Jon Chong-hwa, an analyst at Salomon Smith Barney KEB Securities in Seoul, said: ''The exact damage there has not yet been disclosed but chip production lines are very sensitive to tremors and I think this will lead to another rise in chip prices.''
Taiwan's deep-pocketed government had not unveiled a reconstruction package by Tuesday afternoon, but President Lee Teng-hui reassured the public the government had mobilized all its resources to handle the disaster.
The central bank also said that it was prepared to fully supply demand for money as disaster relief kicked into high gear.
''Taiwan's central bank is arguably one of the strongest central banks,'' Woolridge said. ''Monetary policy and providing liquidity is not going to be an obstacle.''
''There is a substantial amount of room for the...government also to bring in funds for any sort of reconstruction effort that might be required,'' he said.
Taiwan has foreign reserves of around $100 billion.
(U.S.$1-T$31.8)
REUTERS Reut06:09 09-21-99 |
