TAIPEI (Taiwan News) —Molicel, a subsidiary of Taiwan Cement Corp., said that it will adjust production capacity at its battery plant in Tainan's Southern Taiwan Science Park to take over manufacturing from its Xiaogang plant in Kaohsiung, following a fire Monday that injured 12 workers and three firefighters.
Molicel’s Xiaogang plant is a key part of the high-end battery cell supply chain for major international companies, including those producing supercars, electric vertical take-off and landing (eVTOL) aircraft, drones, and AI servers. Due to the fire, the plant will temporarily shut down, and operations will be transferred to Tainan starting in August, per CNA.
The company hopes this initiative will minimize the impact on customers and ensure operational stability.
Molicel said it will also reorganize its production schedule to adapt to the disruption. The company noted that products requiring certification, such as high-end battery cells for aircraft and AI servers, as well as battery packs for supercars, accounted for 25% of the Kaohsiung plant’s output in the first half of this year.
Molicel reported that orders for the third and fourth quarters at its Kaohsiung plant have increased compared to the first half of this year. In response to the fire, most customers agreed to delays in battery cell and pack deliveries.
Molicel has begun the insurance claims process following the fire. While the full extent of damages and compensation is still being assessed by third parties, preliminary estimates suggest that potential losses could reach NT$5 billion (US$154.5 million). The company assured that employee salaries will continue to be paid during the plant’s shutdown.
Taiwan Ratings Corp. has conducted a preliminary assessment of the incident and concluded that the fire will not affect Molicel’s credit rating. The agency noted that as insurance coverage is likely to cover part of the losses, the impact on Molicel’s operations is expected to be limited.
The fire at Molicel's Kaohsiung plant originated in a facility storing approximately two million semi-finished lithium batteries. The city's fire department deployed nearly 100 firefighters to contain the blaze, which took almost 27 hours to extinguish. According to the department, the likely cause was a reaction triggered by damaged lithium batteries, leading to a chain reaction involving other batteries.
