Published in News

Taiwan leaning more on Japan

by on28 November 2019

Fearing China

Taiwan's tech companies are looking to Japanese assets to fortify their defences against rising Chinese rivals.

Apparently Nuvoton Technology emerging this week as a buyer for Panasonic's semiconductor business and consultations on alliances with Japanese companies and M&A deals have been increasing since 2016.

For those who came in late that was when Foxconn acquired Sharp. Now that Sharp is in the black after years of struggles, the acquisition is seen as a Japan-Taiwan success story others are keen to emulate.

In January, Taiwan's United Microelectronics, the world's No. 4 contract manufacturer of semiconductors, acquired a Fujitsu semiconductor plant in Japan's Mie Prefecture. In February, Advantech, a Taiwanese industrial computer maker, purchased a subsidiary of Omron.

The Taiwanese companies are apparently scared of losing their foothold in the global electronics industry and slipping to Chinese outfits. Many made names for themselves with a business model that relied on low-cost production in China, as well as some bold investment decisions. But now China is rushing to enhance its own capabilities in chips and other technology segments, raising concerns that Taiwanese companies will be overwhelmed by what some call the "red supply chain".

Taiwan's tech players hope to break away from competing on costs, strengthen their research and development, and add value to their products by working with or absorbing Japanese counterparts. They hope to unlock Japanese technological prowess that has been hamstrung by limited funds and slow decision-making.

Chaney Ho, Advantech's co-founder, called for more technology cooperation between Taiwan and Japan back in 2017. "Japanese electronics giants such as Toshiba and Sony once built a production network in Taiwan, which fostered our IT industry", he told Nikkei in an interview. A Taiwan-Japan alliance, he suggested, would be the best bet "for developing the world market".


Last modified on 28 November 2019
Rate this item
(0 votes)

Read more about: