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  Taiwan Quake May Hike Chip Prices

The Associated Press
Wednesday, Sept. 22, 1999; 8:43 a.m. EDT

TAIPEI, Taiwan –– The Taiwan earthquake means computer-chip makers will lose up to two weeks of production and could lead to an increase in worldwide prices, analysts said Wednesday.

Prices on the chip spot market have been rising recently because of short supply and high demand, and analysts said the disruption in Taiwan could drive them even higher.

The quake knocked out power at most companies in the the Hsinchu Science-based Technology Park. By Wednesday morning, only partial power had been restored to several leading chipmakers there.

The U.S. investment firm Merrill Lynch said in a report that Tuesday's deadly quake would affect output for one to one and a half weeks.

Taiwan is expected to account for 10 percent of global production in value terms this year, the report said.

But some analysts said that predictions were speculative until a fuller damage assessment was available.

For a few days, prices could move higher, said Aston Bridgman, a spokesman for NEC Corp. "Pricing is about perception. The perception is that there is a problem."

The forecasts were based on the assumption that no major structural damage was done.

Both Taiwan Semiconductors Manufacturing Co., the world's largest dedicated chip foundry, and United Microelectronics Corp. say a full damage assessment is not yet possible.

"Anything at this point is speculation," said Douglas Lee, an electronics analyst at Goldman Sachs in Hong Kong, said Tuesday. "I don't think it will be catastrophic, but it's hard to determine."

© Copyright 1999 The Associated Press

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