In the face of a market boom driven by smart handheld devices, including smart phones and tablet PCs, Taiwan’s information technology industry is facing great challenges. The PC industry has entered a slump under the impact of such devices, which are dominated by Apple and Google’s platforms, while Samsung has used a highly integrated conglomerate model to achieve a commanding position in the market.
From the perspective of Taiwan’s IT industry, Samsung and Apple are difficult to imitate. Although Taiwan’s manufacturers are fairly highly skilled at each stage of the production process, there is no close cooperation between producers at the different stages. Samsung and Apple are able to consider which components, hardware, software and applications to match to make the perfect product: close cooperation and communication between manufacturers from different fields in the setting of specifications in the early stages of the design process is crucial for the future development of handheld devices.
Faced with this change in the production environment, the government has developed a strategy and action plan for the industry based on the manufacturers and the government’s belief that an overall plan was needed to match Taiwan’s industrial structural characteristics to the demands of the smart handheld device industry.
The core idea of the plan: the construction of a high value-added, labor-intensive smart handheld device industrial supply chain, so that Taiwan can become the global center for the commercialization of smart handheld devices and the creation of innovative applications. The main aspects of this strategy are to integrate the manufacturers into a production chain, to master the core technology, to develop wide-use applications and to link training to industry’s demands. These four points are expanded on below.
In terms of integrating the production chain, the main objective must be to strengthen the individual links, but where there may be breakthroughs or deficits in critical technologies there may be a need for government assistance to achieve mass production, or to facilitate upstream-downstream cooperation on preliminary product specification, leading to a perfect match between components and the finished product.
Following numerous industry conferences in the past two years, this cooperation in such has produced preliminary results in such fields as Active-Matrix Organic Light-Emitting Diode (AMOLED) panels and application processor chips.
As for mastering core technology, the ambition is for the government to work with the industry to begin R&D for the next generation of key technologies as early as possible, for such things as processor chips, hard and soft panels, and sensors. Thus while R&D into flexible AMOLED panels was still ongoing, progress was already made in an integration of flexible AMOLED and touch panel technology that would have mass-production potential.
As far as the development of wide-use applications goes, the focus is on how to enhance the added value of the hardware. In essence, it is the applications that sell the hardware. The government plan aims at deep vertical applications, with an emphasis on cross-industry synergy, developing of the hardware plus software plus applications model to come up with a total solution. For example, the M-Police application, which incorporates smart video analysis, and the M-Bike application, developed jointly by bike manufacturers and end-user businesses, were a center of attention at Computex Taipei.
With regard to addressing the discrepancy between supply and demand for talent in the industry, the first step was to compose an inventory of the manufacturers’ requirements and of the available talent pool. Educational institutions were encouraged to develop curricula more in line with industry’s demands and to cooperate with international manufacturers to produce certification courses and mechanisms. Software development contests are to be held to encourage more developers to get involved in creating new applications.
Faced with a rapidly changing industrial environment, government efforts to encourage development must be dynamically adjusted. In keeping with the basic spirit of the plan, future challenges include breakthroughs in the development of key components, such as touch screens or high-end processor technology; strengthening embedded software technology, such as for speech or handwriting recognition; establishing the infrastructure for next-generation communications services; and developing critical, visionary patents.
Taiwan’s IT industry is facing a major turning point, and the government agencies involved are duty-bound to help overcome these obstacles. More importantly, it is hoped that industry members will cooperate with the government in its efforts to promote the sector. (SDH)
Shen Jong-chin is director-general of the Industrial Development Bureau of the Ministry of Economic Affairs.
By Shen Jong-chin
SOURCE / Taiwan Today