In the two decades between 2000 and 2020, Taiwanese firms did business in China rarely in collaboration with one another. For the manufacturing of notebooks and handsets, whoever managed to obtain the orders at the expense of competitors would emerge as the winner. It was a zero-sum game. Therefore, the stock market would favor those who were in the Apple supply chain. And any proposal for inter-company cooperation would usually be seen as something with a hidden agenda.
But now Taiwanese firms understand that they can no longer fight individually. Cross-domain collaboration and complementary partnerships are important. They are also open to the idea of jointly building overseas clusters.
As the industry enters the era of Internet of Everything, market demand comes in a very complex form. Smart applications are offering specific business opportunities, and the electric vehicle (EV) and IoV markets will definitely take off in ASEAN. Under the G2 framework of competition between the two global superpowers, India and ASEAN will seek to work directly with Taiwan, and with intervention by the US will also seek to have Taiwan adjust its over-reliance on production bases in China.
DIGITIMES foresees that India will have a structural advantage in the ICT market in the future. Because of the vibrant developments of its market, local businesses no longer give top priority to low prices when looking for sources of product supplies. They now give more emphasis to product quality and supply efficiency with which they can achieve good sales in the local market. India is trying to attract investors with its PLI scheme, but Taiwanese firms must understand that they need to make long-term deployments in India. India is a huge and complex market with a population of 1.4 billion where overwhelming instant success is unlikely. Taiwanese firms, with their prowess and rich resources, should not aim for short-term returns only.
India may be seeking instant success in its industrial developments, but Taiwanese firms should look at the long term. They should phase their business developments and reap their profits gradually. Long-term developments will enable joint innovations, sharing and co-prosperity. Taiwan must embrace a clear strategy with flexible tactics to push forward software-hardware integration.
Taiwan's advantage comes from the width and depth of its industries, and its experience over the years. Taiwanese firms used to be playing second fiddle to brand vendors, earning meager profits from their contract manufacturing businesses. They have enormous manufacturing bases in China, but every Taiwanese maker knows it well that the bigger your business scale, the lower the gross profit. They have relied mainly on low cost of capital and their capability of avoiding making any mistakes. Their three to four decades of exceptional hard work may be paying off now: it is the solid foundation of the competitiveness of Taiwan's industries.
