60% of Green Components for Future EVs will come from Taiwan
By Zhang Ru-xin, Hu Xiu-zhu
With soaring oil prices, ever-growing awareness of the need for environmental protection and the rush to develop electric vehicles on a global scale, the balance in the automobile industry has shifted. The Green Industrial Revolution means a new race has begun. Since Taiwan has a relatively comprehensive electric vehicle components supply chain, if it is able to leverage its strengths and support the global electric vehicle market, a new Blue Ocean for this emerging industry will thus be born.
“For identical types of automobiles, electric vehicles are 42% more energy-efficient and emit 32% less CO2 than vehicles with gasoline engines.” Deputy General Director James Wang of ITRI’s Mechanical & Systems Research Laboratories (MSL) said that after the 2009 UN Climate Change Conference in Copenhagen, awareness of the need for protection of the environment became heightened, which is key to the accelerated development of the electric vehicle industry.
There is a product that utilizes over 20 microprocessors and employs 10 operating systems and application programs to control all of its functions. The customer is able to connect to headquarters from anywhere and check the performance of the product. Recharging is possible as long as there is an electrical outlet. Would you say it is a piece of high-tech equipment or an automobile? This is where electric vehicles subvert traditions. When the gasoline engine, gearbox, fuel tank, radiator, exhaust pipes and catalytic converter are removed from an automobile and servo motors, batteries and a sophisticated electronic control system are installed as their replacement, it is no longer a car but a high-tech, innovative application.
The electric vehicle has rewritten the rules of the game, forcing the giants of the auto industry to return to square one. This starting point is extremely favorable to Taiwan. “Open the electrical control system, and there you will find IC boards and electronic components, which are all familiar to Taiwanese.” Cheng Kuo-rong, vice chairman of the Luxgen Motor Co. said that “Automotive electronics will account for 40% of a vehicle’s total production value, and electric vehicles will constitute more than 70%.”
To Seize Business Opportunities, Industry, Academia and Research Community Offer Advice on EV Plans
By Hu Xiu-zhu, Zhang Wei-shan
We have invited Mr. Kuo-rong Chen, vice chairman of Luxgen Motor Co. and president of Yulon Motor Co., Ltd.; Professor Jung-Ho Cheng, Department of Mechanical Engineering, National Taiwan University; and President Joe (Lung-Chou) Huang of the Automotive Research & Testing Center (ARTC) to talk about how Taiwan should seize opportunities in the global electronic vehicle market:
Mr. Chen: Taiwan’s Auto + IT + ET industry resources have gradually matured, and this represents the greatest opportunity and advantage to develop smart electric vehicles. Yulon Group’s private brand LUXGEN has launched the world’s first smart electric vehicle, combining home-grown technologies such as battery systems, control components, electric motors and power management systems, resulting in significant advantages.
Prof. Cheng: If Taiwan wishes to occupy a key position in the electric vehicle industry, we must be able to produce key components that are not easily replaceable (e.g. battery technology or the IGPD technology which only Japan possesses). Otherwise we should engage in research and development and take a leading role as system integration vendors in order to gain that critical position.
Mr. Huang: When electric vehicles first appeared on the international market, Taiwanese firms were already involved in supplying components to major international manufacturers and providing customized design services. For example, FUKUTA Elec. & Mach., Gongin Precision Industrial, Chroma ATE, and E-ONE MOLI ENERGY have received recognition from major international manufacturers and become suppliers of key components such as vehicle motors, battery modules and power control modules to electric vehicle vendors like Tesla Motor (US) and BMW Mini-E (Germany). The island of Taiwan has a north-south span of approximately 400 km, with clearly defined inhabitable regions and appropriate distances between cities. It possesses a comprehensive power supply network and a sophisticated transportation system, and enjoys a considerable advantage in becoming a model island for the deployment of electric vehicles.
SECOM Develops New Business
Enters the Healthcare New Blue Ocean
By Hu Xiu-zhu
As early as 33 years ago, when the Internet was not yet widely available, SECOM was already employing “networks” to conduct business. The company used telephone dial-up to upload notification information in order to carry out its security services.
In an export era where the “household is the factory,” overlock machines (sergers) were often stolen from garment industry vendors, which led to a high demand for security services. SECOM was able to take advantage of this trend and gradually became a well known corporation. As the pace of liberalization of the banking industry accelerated, the demand for automated banking services also increased. Currently there are 19 thousand automated teller machines (ATMs) in Taiwan and SECOM enjoys a market share of 40-50% of the ATM security market.
According to an Institute for Information Industry (III) survey, Taiwan’s current penetration rate of household Internet access has exceeded the 65% mark. Among households with Internet connectivity, 78% have broadband services. Therefore, it is relatively easy for vendors to offer monitoring-based security services, e.g. remote healthcare. In 2008, the number of senior citizens over the age of 65 in Taiwan had reached 10.4%, which represents an aging society attractive to vendors seeking business opportunities in this “gray-hair” market. SECOM has also stepped out of its comfort zone of traditional models of system security and started to embrace the new Blue Ocean.
Starting from 2005, SECOM has been promoting a “GPS Lost Person Location System.” Using Chunghwa Telecom’s AGPS system deployed on base stations island-wide, it is possible to find a person with a cell phone or via the Internet. SECOM has so far successfully found 20-30 lost senior citizens. In addition, the Social Affairs Department of Yilan County has also employed this system to help women who are victims of domestic violence.
Mastering the Key to Growth
Tips for Innovation and Management
By Zhang Wei-shan
Innovation is the driving force behind a sustainable enterprise. Although a business that is complacent risks losing its competitiveness, engaging in innovation does not guarantee success either. Therefore, innovation must be carried out meticulously and put into practice in a systematic manner. The IT Service Management Forum (itSMF Taiwan) and ValuePlus Consulting Inc. jointly invited Dr. Johnsee Lee, Chairman of the Development Center for Biotechnology (DCB) to give a speech in an August 18 seminar. In his speech he examined enterprise innovation from the perspective of both theory and practice. Vice president Andrew Chang of the Samsung Group was also invited to share his practical experiences in innovation.
In the process of innovation, relying on external resources is an important step. Dr. Lee said that when he worked at the Industrial Technology Research Institute (ITRI), a company in the United States planned to release 200 patents. ITRI formed a team and conducted research on the deployment and applications of these patents. At that time, MediaTek spent NT$700 million to acquire these patents and was able to gain access to a multibillion (NT) dollar market via its patent strategies. The U.S. firm successfully sold the patents, and ITRI received the service fees. This is a concrete example of the adoption of external intellectual property rights to create new business opportunities.
Dr. Lee said that there are quite a number of patents owned by Taiwanese companies, but they have generally not been created to meet the needs of the market. Enterprises need to be positioned at a high level when introducing innovation, and should do so from the perspective of changes in societal trends, demand and applications in order to achieve a level of invention that is high enough. It does not require too much manpower, either. Take Apple Inc. as an example. The company’s most powerful and sophisticated team has less than 10 individuals, yet the products that they develop and the company’s innovative business models are known the world over. The conclusion is that in order to start the engine of innovation, an incentive and reward mechanism must exist in the organization.