Status Report on Lite-On Technology's Shijie Factory Fire

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Press Releases

2008/02/12

Lite-On Technology (2301 TW) experienced a fire at the Shijie factory in Dongguan on February 3, 2008. According to local firefighters the cause was an electrical short circuit. The company is processing an insurance claim.

The Shijie factory produces LCD monitors. Fourteen production lines suffered damage, while other production lines were left untouched. All LCD monitor production will be temporarily moved to the undamaged lines. Current market demand for LCD monitors is in low season, and estimates are that overseas inventories can supply a portion of customer demand over the next two months.

Property damaged by the fire included buildings, equipment, and inventories, and is currently being verified by Lite-On and the insurance company. Lite-On had full insurance coverage.
The book value of losses included NT$247 million for factory buildings, NT$671 million for equipment, and NT$1.348 billion in inventories.

Monitors comprise a large part of Lite-On’s revenues, but the fire should have a limited effect on profits. An evaluation of the fire’s impact is underway and will likely appear in the second quarter financial reports.

In regards to the fire, Lite-On has taken the following measures:

1. On February 10th, Lite-On submitted formal notice to insurers Ping An Insurance Company of China, as well as all required compensation documents.

2. Lite-On notified affected customers quickly to minimize the impact on their business.

3. Lite-On is now making every effort to resume production, including modifying the unaffected production lines. Other production lines will undergo repair and begin production as soon as evaluation by the insurance company is complete.