Aug 9, 2000

Taipei - - Due to the fast development of the new information appliance (IA) market, sales of these products from Taiwan PC makers like Acer, Mitac and First International Computer are expected to become hectic in the fourth quarter of 2000, industry sources said in Taipei.

Taiwan's IA production volume will reach 52 million units in 2005, representinv a world market share of 39 percent, according to the latest survey of the non-profit Market Information Center of the Institute for Information Industry.

Taiwan manufacturers were eager to to venture into the research and production of these items due to the low profit margin from their computer OEM business, the institute said. They expect that sales of their IA products will grow dramatically in the second half, expecially the fourth quarter, industry sources said.

Acer alone alone expects that it's IA sales will reach two million units in 2000. Acer will strive for orders of IP-Phones for the network telephone business in Europe and Mexico with the second half of this year. The company will also launch it's own-developed personal digital assistant (PDA) soon.

Mitac expects it's sales of STBs ( set-top-boxes ) will total between 400,000 and 500,000 units in 2000.

First International Computer (FIC) is optimistic that it's IA sales will reach 50,000 units per month during the fourth quarter. The company will launch a new palm-sized computer "Aqua" in the fourth quarter

Government support

Local observers say the secret of the many big, medium and small enterprises of Taiwan proliferating strongly in an news market at such short notice lies in the promotion and support of new technical trends by the government, which already was keen enough to declare IT a "strategic industry" in the early 80s. It systematically engaged in building it up through a well coordinated system of monetary and organizational supports. These included funding research and development by establishing elite technical and commercial institutes like ITRI ( Industrial Technology and Research Institute ) and III ( Institute for Information Technology ) with their economic branch MIC (Marketing Intelligence Center ) which all handed down their know-how to the then fledgeling industry. Furthermore promoting educationial efforts helped to create an elite of engineering specialists. There are all signs that this kind of networking will keep on as scheduled:

Taiwan's government, attracted by the vast potential resulting from the new IA development, has joined with the private sector in the vigrorous development of the IA sector, with the aim of making the island the world's authoritative manufacturing center for such products within just a few years.

A white paper, published by the National Science Council earlier in the year notes that the integration of computers, telecommunication and consumer electronics ( the so-called 3Cs ) will transform these technologies into a single mainstream industry in the post-PC era and that this is no less important that the IC industry which the government began promoting two decades ago.

As the world's third-largest producer of IT products and fourth-largest IC manufacturer, Taiwan is in a strong position for the development of the IA industry, the paper said.

To achieve this goal, the government will set up the infrastructure and mechanisms needed to stimulate private investment in the IA field and will spend 2 billion Taiwan dollars ( approx US$ 64 million ) this year alone to support this development. In addition, the Ministry of Education will encourage colleges and universities to offer 3C-related courses with the aim of turning out 750 engineers and 150 holders of doctor's degrees in this field every year.

To start, the NSC has chosen five products for priority development: Digital TVs, mobile Internet-access devices, devices for Internet transmission networks, e-commerce software and hardware, and Internet telephones.

The Industrial Development Bureau (IDB) of Taiwan's Ministery of Economic Affairs urges Taiwan manufacturers to enter the dynamic IA market through collaboration with leading semiconductor factories. The IDB recently signed a contract with Texas Instruments (TI), joining efforts to promote TI's leading Digital Signal Processing technology among Taiwn IA manufacturers.

"The IA market is a lucrative market where we think Taiwan manufacturers will have competitive advantages. By working with a strong technology partner like TI, we feel confident hat Taiwan will win in this market just as we did in many other areas of the information technology industry," said Dr. Shu Yuan-shan, director general of the IDB

"This pragmatic system of government-industrial cooperation is unique in the world, and a far cry from our German administration's attitude, concentrating on high-handed regulatory interference in the economy and our starry-eyed, procrastinating university education, sometimes hostile to technoly, but mostly out of the real world of international competition", a German visitor the the recent Computex show told Taiwan Technology.

The government-industrial web of Taiwan seems worth the efforts also in the still infant business of post-PC IA technology. The worldwide Internet appliance market is predicted to grow from 11 million units last year, worth US$ 2,4 billion, to around 90 million units in 2004, worth almost US18 billion, according to the International Data Corporation.

Currently, Taiwan is in the lead with it's personal computer design and manufacturing services, and apparently has no intention to relinquish this head start, signified by the number of Taiwan manufacturers of Internet appliances that have already signed up for the forthcoming CeBIT 2001 show in Hannover, according to the Taipei office of Deutsche Messe AG. "Considering the number of exhibitors, it is startling every year which impact this small island nation has on the world's biggest IT event", an official of the Hannover representative office told Taiwan Technology