Can Taiwan overcome the component rigor?

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Can Taiwan overcome the component rigor?

Taipei (Taiwan) – If you bother to actually leave computexed Taipei city and visit other places such as Hualien in the east or Kenting in the very south, you will experience the real beauty of the island of Formosa. In fact Taiwan has some of the most beautiful sceneries we’ve ever seen.

Less beauty, but variety can also be found in the IT industry, because the manufacturers are trying hard to differentiate from each other. Taiwan has traditionally been a component island, as the vast majority of basic hardware, such as motherboards and graphics cards, typically was produced here. Over the last couple of years, cost considerations caused a shift of manufacturing to mainland China, which certainly helped to increase capacities, but it does not solve the basic problems of the Taiwanese hardware landscape. Components are increasingly becoming commodity goods, with differentiating features being merely interesting for the hardcore enthusiasts. Everybody else will end up buying PC components in supermarkets very soon; money is not to be made any more in this segment.

The key to ongoing success thus are platforms and solutions that do provide real value to the customer. Both AMD and Intel and the hardware followers in Taiwan selected the digital home to become their main business objective. Companies such as Asus, Foxconn, ECS, MSI, Gigabyte and many others need to come up with sexy and feature-rich products in order to beef up their brand awareness, but many of them are hold up by big OEM businesses. If you provide components or even systems to the Dells, Apples or Gateways, these will not be happy to see emerging competition that could even be using some of their knowledge.

So, Taiwan, you will have to overcome your very customers if you want to make yourself a place at the gods where tech believers can find the Sonys and the Samsungs. From an engineering and creativity point of view we are convinced that you can easily do it. You’ve got great brains, and additional resources can easily be imported. But you still lack a sense to market your products.

When we walked across the Computex halls, we repeatedly asked for product introductions by your marketing people at various booths on the show floor. Whether it is a language barrier or not: Most of them were not able to excite us about products that are potentially great and could do well. Sadly, this success might never happen, and many great products will go down the toilet, because nine out of ten company representatives we spoke to are still in a deep component rigor. Don’t tell us what the components or the features are. Most of us either know it and can look up the basics in data sheets, or we do not really care about them. It is not about “how does it work” any more. It is about “what can we do with it”.

There is more! Read the complete Computex 2006 coverage on our Microsite!