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Technology Stocks : Taiwan Semiconductor (NYSE: TSM)
TSM 341.25+4.3%3:50 PM EST

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To: Allen champ who wrote (570)9/23/1999 12:41:00 AM
From: Allen champ  Read Replies (1) of 684
 
Taiwan's fabs negotiating resumption of power supply

By Mark Carroll
EE Times
(09/22/99, 05:40:07 PM EDT)

HSINCHU, Taiwan ( ChipWire) -- Chip makers in Taiwan are currently negotiating with the Taiwan government to
determine when their production facilities will have power to go back on line following the devastating earthquake that
struck the island early Tuesday.

According to Peter Chang, vice president of operations for UMC Group, "At present, the government of the Republic of
China has decided that restoring electricity to the general public is the first priority. Therefore, at this time, it is not
exactly clear when electrical power will be restored to our facilities and normal production can resume."

Electrical power hasn't been restored on Taiwan because two nuclear power plants in the north of the island have yet to
go back on line. "The government has told us that they will be back on line by Thursday afternoon," said Ron Norris of
Taiwan Semiconductor Manufacturing Co. (TSMC). "Even that added electricity won't be enough to supply both the home
and industrial needs of the island though. We are negotiating with the government to see if we can ge a larger allotment
of power."

TSMC had about 10-to-20% of its standard power on today, or basically enough to run administrative lights and
computers. "We need to have full power before we can go inside the clean rooms and begin to fully check out the
damage," Norris said. "We don't want to send people in until the evacuation procedures are fully up and running."

At least one fab in Taiwan is already back up and running. Powerchip Semiconductor Corp. was only down for one hour;
the company has an alternative power source that it uses in conjunction with the government's power grid. Powerchip is a
contract manufacturer of DRAM, with most of its 22,000 wafers per month going to Mitsubishi Electric Corp. of Japan.

It will still take time to get fabs back up and running after power is restored in Taiwan. All the chemical piping of the
facilities will need to be checked, as will the status of the equipment. "It will take about a week for us to check out the
equipment and get back to a full ramp," said Norris. "We know already that some repairs will need to be made"

For its part, UMC maintains that it can get back up and running in five days. "The clean rooms are intact," said Chang.
"There appear to be only some broken ceiling tiles. All process gas, water, air handling, and power lines appear to be
fully intact. Our backup power systems operated as intended in response to the disruption, allowing the clean room to
maintain the required level of air purity."

It is near certain that the quartz tubes that hold wafers in the fabs' furnaces, and the wafers that were inside them, are
ruined. "The quartz tubes are broken," said Norris. "We have already ordered spares and they will be delivered soon."
UMC also said that it will need new quartz tubes.

Just how many wafers have been damaged due to the power shutdownm is not yet known. "Any wafers that were in a
furnace at the time arem most likely no good," said one securities analyst here. "Typically, furnaces are loaded with a
hundred or so wafers. For wafers in a lithography machine the situation isn't so bad. Wafers that were actually in a
lithography process are also probably damaged, but the others in the cassette will be fine."

Whether insurance will cover the damages and lost revenue is an open question. "It's definitely a gray area," said the
securities analyst. "I was on the phone all day with the fabs' CFOs and that's what they were all doing, checking out
there insurance policiesIt seems that they are covered since it's a business liability."
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