Asahi Glass Furnace Repair May Affect Glass Supply For 4Q 2006 And 1Q 2007

Asahi Glass Fine Techno Taiwan, a subsidiary of Asahi Glass, has shut down one of its furnaces for repairs, as the furnace was reportedly experiencing bubble problems during the manufacturing process, which led to lower yield rates, according to market research firm WitsView.

Generally speaking, furnace repairs can be classified as a hot repair or a cold repair, WitsView pointed out. During a hot repair, it is not necessary for the furnace to suspend operations. However, the manufacturing process becomes extremely slow, seriously affecting glass production. When a cold repair is conducted, the furnace is required to close down. Sometimes the fire resistant bricks must be torn down as well. If changes in the furnace design are performed, the plant must undergo testing for a period of time.

WitsView said the production halt at Asahi's furnace will supposedly require two to three months of time, and is scheduled to go online again in January 2007. As the production base is mainly responsible for the manufacturing of 5G glass substrates, the supply of this particular size should be affected the most.

Currently, Asahi Glass has two plants in Taiwan that churn out 6G-and-below glass substrates. A third facility will become operational in the first quarter of 2007. In addition, a 7.5G polishing line located at the Tainan LCD TV industrial park (also referred to as the "Tree Valley Park") will begin mass production in the second quarter of 2007, according to WitsView.

With one of Asahi's furnaces under repairs, panel makers are looking to other sources for a stable supply. Chunghwa Picture Tubes (CPT) and Chi Mei Optoelectronics (CMO) have respectively turned to Nippon Electric Glass (NEG) and NH Techno Glass (NHT), while AU Optronics (AUO) is relying on Corning, WitsView noted. As these glass makers make use of their inventory to handle the increased demand, there should be no immediate impact on the glass supply, it remarked.

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600450 Asahi Glass Furnace Repair May Affect Glass Supply For 4Q 2006 And 1Q 2007

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