Why Taiwan Matters ?

Newsweek May 05
Taiwan; the global economy couldn’t function without it. But can it really find peace with China?

The Political Gloat:
We are not sure is China really hard against Taiwan going independence but many like to guess that such political knot is merely a political play. Means that no war is on the way because China is still depending on Taiwan and the latter is a crucial economy force in the world; being the number one I.T supplier in the world.

World Leaders:
Taiwan having the following recognition in its resume where it is the reign:
The number one:
- Provider of chip foundry services with 70% of the market worth $8.9 billion.
- Producer of notebook PCs, with 72% of the market, worth $22 billion.
- Provider of LCD monitors, with 68% of the market, worth $14 billion.
- Producer of cable modems, with 66% of the market, worth $480 million.
- Semiconductor packaging with 36% share, worth $3.4 billion.
- Producer of PDAs, with 79% of the market, worth $1.8 billion.
- Producer of wireless LAN equipment, with 83% of the market, worth $1.3 billion.
The number two:
- Producer of TFT-LCD panels, with 35% of the market, worth $7.6 billion.
- In servers, with 33% of the market, worth $1.8 billion.

It is obvious that Taiwan is expert in engineering and manufacturing. According to the author, Taiwan started off with being the contract manufacturer to the world (such as what Flextronics and Hon Hai). After decades of success and with the eventual establishment of R&D teams, they are now not only strong in the area of contract manufacturing (where they are given technologies to be manufactured) but also at creating new designs.

Since Taiwan is strong in term of manufacturing and engineering, it also means that they have no time for branding. Most of their products are exported to the USA and according to the Americans, they are like the middle east to the oil.

Dell and HP will source $10 billion and $21 billion respectively from Taiwan this year, Apple is boosting its order book from Taiwan companies by 28% from a year ago, to $5 billion.

Nevertheless, according to analyst, such phenomenon is good yet short lived because China is picking up. Even though the following Taiwanese high-tech are relying on China for its outsource job and yet not willing to disclose the technology, Europeans and Japanese companies are looking to tap into the bandwagon by providing China with technologies Taiwan not willing to share.

So perhaps China is famous for copy-cat but who cares because the tech world is moving at such pace where it is either now or never. You either risk certain things to achieve huge success or never bother to achieve anything because somebody somewhere in this world would have the same idea and brain that you are having.

The top guns are:
TSMC, CEO=Morris Chang
Hon Hai, CEO=Terry Gou
Quanta, CEO=Barry Lam
Formosa Plastic, CEO=Y.C Wang
Compal, President=Ray Chen
Asustek, Chairman=Jonney Shih
BenQ, CEO=K.Y. Lee
MediaTek, Chairman=Tsai Ming-kai.
UMC, Chairman=Robert Tsao.

Lacking Expertise:
Because things are moving so fast, to start R&D from scratch would be too slow sometimes. They are always in need of high-tech experienced people.

According to Hsiao-ping lin, head of Faraday Technology, which specializes in chip design services. He hopes to hire Indian engineers at the moment to fill the gap. However, in the long run, they are planning to setup R&D center in mainland China.

China Factor:
So the trend is such that Taiwan will design the technology and pass it over to China to manufacture it, all because of costing factor. No doubt it is not good for the political playground because this strengthen Taiwan’s dependent on China and creating lesser impact during negotiation sessions for the political players. Nevertheless, it is such a standard trend because the only reason why Taiwan is what it is today is because its labor cost (high-tech or low-tech) is still cheaper than those of USA. This is quoted as saying by Kai Hsiao, director of global procurement for greater China at HP that “we are talking about one third of the cost!”

The author suggests Taiwan to create its own brand in order to facilitate for more jobs; more international marketing job.

There are plenty of brand actually, such as
www.lantech.com.tw -> Realtek manufacturer
www.sis.com.tw -> Display card manufacturer


Anonymous said…
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