The Rise of Red Supply Chain

As a matter of fact, there have been numerous reports in the media about the so-called “Red Supply Chain,” saying that China’s electronics industry is gradually displacing Taiwan’s. At the same time, mergers and acquisitions by Chinese companies resulted in the circulation that Hsinchu Science Park is on sale, etc.

Besides, reports have said that, for China, the stage of providing cheap labor for assembling high-tech equipment has passed and that it has succeeded in joining the supply chain for precision parts for Apple Inc. In other words, China has entered the technology-oriented era.

Undoubtedly, China is becoming Asia’s high-efficiency, rather than low-cost, production center and Beijing is implementing various policy incentives to bolster the nation’s electronics industry in an effort to place it at the heart of the Asia-Pacific supply chain. Following these developments, Taiwan has become sensitive to the term “Red Supply Chain.” Finding ways to withstand it has become a hot topic.

ITRI Executive Vice President C.T. Liu said the institute’s will keep focusing on value-added systems with intelligence drives its ability to offer innovative technology solutions across different market segments.

ITRI Executive President Liu Jonq-min stated, cross-border integration and innovation are two arrows for Taiwanese IT industry to survive in the rise of the Red Supply Chain.

“ITRI has been working hard in connecting the industry with universities by modularization and platformization to promote the cross-border innovations,” added Liu Jonq-min.

“Replacing other products or technologies isn’t necessary when a new product or technology is being unveiled, but to find new opportunities, and to be capable of encouraging innovations to change the rules of the game,” concluded Liu Jonq-min.

ITRI’s two new Centers to Bolster IoT and 3D Printing to Widen the gap Between Taiwan and China

ITRI announced in December 2015 the establishment of the Smart Microsystems Technology Center and the Laser and Additive Manufacturing Technology Center. The two centers will be led by Chu Chun-hsun and Fanghei Tsau, respectively, both of whom currently serve as Deputy Executive Directors of ITRI’s Southern Region Campus.

Figure 1 : ITRI Executive President Liu Jonq-min says cross-border integration and innovation are two arrows for Taiwanese IT industry

ITRI Chairperson Tsay Ching-yen remarked that the new generation ICT applications have sparked Industry 4.0 and the creation of smart factories. Coupled with 3D printing, which facilitates customized production, it is expected that these technologies will trigger major changes in the global manufacturing sector.

ITRI’s hope in establishing the two centers, he said, is to drive industrial development and to enable Taiwan to rapidly secure beachheads in the international market. ITRI President Liu Jonq-min also commented that the two centers will enable Taiwan to produce key modules and develop critical technologies on its own, thus building an industrial cluster and ecosystem, and enhancing Taiwan’s competitiveness.

Chu Chun-hsun, who obtained his PhD in Material Science and Engineering from Taiwan’s National Cheng Kung University, joined ITRI in 1993. He formed a top-notch R&D team in the Southern Region Campus in 2002, which has since yielded concrete achievements in the development of MEMS platforms and research alliances.

Chu indicated that with the focus on smart manufacturing and the Internet of Things, the new Smart Microsystems Technology Center will forge industry links and international R&D alliances. By developing critical applied technology in the integration of smart sensing and microsystems, as well as innovative industrial-level and consumer-oriented smart sensors, ITRI will assist industry in rapidly entering the market and enable Taiwan to become a world-class R&D hub for smart microsystems technology.

Leading the team in laser and additive manufacturing is Tsau. He received his PhD in Aerospace Engineering from Georgia Institute of Technology and once served as the Executive Vice President and CTO for Young Green Energy Co., a wholly-owned subsidiary of Coretronics Corporation. In recent years he has played a key role in bolstering the technological standards of Taiwan’s laser applied technology and the integration of manufacturing process hardware and software.

He stated that lasers can be used not only in 3D printing, which is also known as additive manufacturing, but in subtractive manufacturing as well for better precision and quality. In the future, the new center will focus its R&D on a high value laser process development platform, additive manufacturing process and equipment, and laser application systems and modules. The center will also have a comprehensive manufacturing test laboratory for laser applications.

ITRI has for many years sought to support industries in southern Taiwan via the active development of smart MEMS, 3D printing, and laser applications technology. It built an 8-inch MEMS base for R&D and pilot production, and also founded Taiwan’s first laser applications pilot production plant and laser metal additive manufacturing laboratory, leading to the development of the “Laser Optics Valley.” The two new centers will continue to expand ITRI’s R&D capacities, with the hope of driving industrial upgrading and innovation to generate greater economic value.

Golden Asia Fund II, L.P. Leads Startups to Capture Blue Oceans

To enhance bilateral cooperation between Taiwan and Japan, the Industrial Technology Investment Corporation (ITIC) of ITRI and Mitsubishi UFJ Capital (MUCAP) announced another collaboration on January 6th: the Golden Asia Fund II, L.P., with a size of NT$ 2.5 billion.

This is a continued effort after Golden Asia Fund Ventures, which has facilitated the launch of the first Taiwan-Japan joint venture laser company and made a Taiwan-based brushless DC motor control IC company enter Japan’s supply chain. Following these successful examples, the new fund aims to extend its influence and support startups to carve out a place in blue oceans, grabbing a considerable share of both the Asian and global markets.

According to Cho Shih-chao, Deputy Minister of Economic Affairs (MOEA), Japan has been Taiwan’s main source of foreign capital and technical investment. The bilateral trade volume was approximately US$ 53.3 billion as of November 2015, and the accumulated Japan-to-Taiwan investment over the past years is up to US$ 18.4 billion, demonstrating a highly complementary bilateral industrial structure.

ITRI Chairperson Tsay Ching-yen stated that the Golden Asia Fund Ventures has facilitated collaboration between companies in Taiwan and Japan, particularly in R&D, design, manufacturing and marketing. Currently, the fund has invested in 7 companies in Taiwan and another 7 in Japan.

Four of the Taiwanese companies have grown into listed companies, and one will be registered as a general stock company in 2016. In Japan, one of the companies was merged and another is expected to enter Japan’s stock market in 2016. The overall investment value is estimated to be 1.5 times larger than the size of the fund. The Golden Asia Fund II, according to Tsay, will develop based on the first joint fund and hopefully can assist enterprises in the Asian-Pacific region in connecting to the global market as a new force in the blue oceans.

Kei Andoh, President of MUCAP, pointed out that MUCAP is a venture capital firm of Mitsubishi UFJ Financial Group, the biggest of its kind in Japan, and that it has won the trust of investors through its more than 40 years of achievements in venture capital. Cooperating with ITIC has allowed MUCAP to further support Japan-based enterprises that stand out in technology, brand image and innovative operation in achieving win-win cooperation with Taiwanese enterprises. President Andoh is confident about the future prospects of the Golden Asia Fund II, as Taiwan and Japan complement each other very well with respect to their industrial competence.

In addition to MUCAP, investors of the Golden Asia Fund II include Japan’s Akita Bank, and Taiwan’s Chang Chun Group, Super Electronics, Superior Plating Technology and Airich Investment. The first stage has seen a total investment of NT$ 1.5 billion to date, and an increase to 2.5 billion is estimated. The Fund will focus on a wide range of fields, including high-end material, precision machinery, healthcare, cloud applications, and big data analytics.

More About ITRI

ITRI is a nonprofit R&D organization engaging in applied research and technical services, aiming to innovate a better future. Founded in 1973, ITRI has been dedicated to helping industries stay competitive and sustainable.

Over the years, ITRI has nurtured more than 260 companies, including well-known global semiconductor leaders such as TSMC and UMC. Meanwhile, it has cultivated over 140 CEOs in the local high-tech industry.

ITRI has played a vital role in Taiwan’s economic growth as it shifted from a labor-intensive industry into a value-added, technology-driven one. Moving forward, the institute will continue serving as a pioneer for industries by strengthening its capabilities of multidisciplinary innovation and cooperation with international partners all over the world.