LCD panel makers Innolux Corp (群創) and AU Optronics Corp (AUO, 友達光電) yesterday said that water restrictions do not threaten their production, as they have increased their usage of reclaimed water.
Innolux and AUO said that they recycle more than 95 percent of their wastewater and use it for flat-panel manufacturing, helping to them minimize the effects of the water shortage.
The companies said that they are well-prepared for more stringent water conservation measures, as they have signed supply contracts with private suppliers to transport water to their factories using tank trucks.
Photo: Chen Mei-ying, Taipei Times
As water supply remains stable, no trucks have been commissioned yet, the companies said.
“We have planned ahead for any contingency. It is still manageable if the water restrictions deepen to 15 percent, from 11 percent recently and 7 percent at the beginning [of this year],” Innolux president James Yang (楊祝祥) told reporters on the sidelines of the Smart City Summit and Expo at the Taipei Nangang Exhibition Center’s Hall 2.
Innolux also sought help from the Tainan City Government to find an alternative water source, Yang said.
Photo: Lisa Wang, Taipei Times
The company has signed an agreement with the city government to use reclaimed water from households, he said.
In addition to reducing water supply during the severe drought, the Ministry of Economic Affairs also plans to impose water surcharges on major water users, such as panel makers, as early as next year, which would push up manufacturers’ costs.
Innolux plans to talk with customers about sharing the extra costs, company chairman Jim Hung (洪進揚) said.
The water supply issue is less of a problem than the shortage of chips used in flat panels, Yang said.
Driver ICs, touch sensors, and power management chips and glasses are in short supply, Innolux said early this month.
Tight supply of key components would affect shipments slightly this quarter, the company said.
Overall, Innolux is optimistic about customer demand, and order visibility is very clear, Hung said, adding that panel prices are likely to continue rising in the second half of this year.
Panel demand has surpassed supply as telecommuting, remote learning and stay-at-home trends have boosted demand for notebook computers and small-sized TVs amid the COVID-19 pandemic, Innolux said.
“I think we have relatively better pricing power this year,” Hung said.
Separately, AUO said that it is scouting sites overseas to build new panel module assembly lines in response to customer demand, especially from the automobile segment.
The company plans to build a plant in North America and is also considering constructing plants in Europe and Southeast Asia, AUO chairman Paul Peng (彭双浪) told reporters at a news conference.
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