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Water Rationing in Taiwan Influences Global PCB Supply

By Korbin Lan
Published: Apr 20,2015

TAIPEI, Taiwan - Due to water shortages in Taiwanese water reservoirs, measures have been implemented to limit water supplies, and this has caused electronic component supplies to be stretched thin, triggering price increases. Among these components, printed circuit boards (PCB) have been influenced most significantly. Recent customer advanced orders or value added package production capacity have seen price increases of approximately 3%, and this is the first time the PCB industry has experienced price increases during the traditional low season.

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The global processing capacity for PBC is concentrated in Taiwan, especially in Taoyuan and New Taipei City. However, the production process for PCB requires large amounts of water, and as soon as water supplies are insufficient, it influences production. Currently Taoyuan and New Taipei City have implemented a “five days on, two days off” water rationing measure, which has limited production capacity.

In order to avoid interruptions to shipments, downstream companies have greatly increased the picking up of goods from factories and value added package production. Furthermore, Apple is one of these downstream companies.

PCB manufacturers state that this year Taiwan is experiencing its most severe drought in 68 years. Clients are concerned that goods will not be delivered smoothly, and they are putting in orders at least three weeks in advance. These advance orders are not only for brand-name consumer electronics, but also for IoT, Industrial PC, automotive, and networking clients, who are also considerably zealous.

Industry figures have stated that in mid-April, due to water supply constraints in Taiwan, clients must place orders in advance for high-grade PCB processing capacity. They are placing orders six to eight weeks in advance; in addition, for the sake of stable supply shipments and production capacity for value-added packages, selling prices for clients have increased by at least 3%.

After PCB manufacturers have raised prices due to water rationing, the market is closely paying attention to whether or not DRAM panel manufacturers located in the water rationing areas, such as Nanya, Inotera, and Chunghwa Picture Tubes will also follow with price increases.

(TR/Phil Sweeney)

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