A few days into the new year, the workers of electronics maker Unico learned the hard way about the brute force of China's industrial revolution.
The Malaysian firm had been providing computer motherboards to chip giant Intel Corp, which runs a big assembly plant just down the road, when a Chinese rival grabbed the contract by offering to do the job for about half the price.
At a stroke, half of Unico's 1,600 workforce was laid off.
"We make very good products -- high quality, fast delivery. Unfortunately, China's running a lot cheaper than us. That's the name of the game," said Alex Soon, Unico's chief financial officer.
It's a game that's being played at breakneck speed across Asia. Hardly a day goes by without a company announcing plans to open a plant in China to tap into the country's unbeatably low labor costs and fast-growing market of 1.3 billion consumers.
For all the dislocations that China's emergence as the workshop of the world is causing, people in Penang at least show remarkably little bitterness toward it.
"We were in the same position in the seventies as China is today," said K. Veeriah, the Penang secretary of the Malaysian Trades Union Congress.
"We've come full circle. A lot of people don't understand the impact that China is going to have over the next five years, but I don't think there's any resentment," Veeriah said.
Indeed, if China's rivals respond nimbly by developing new skills, they should be able to carve out niches in higher-margin industries where China cannot compete and take advantage of rising Chinese demand for tourism, health and education services.
Last week, US-based computer hard-disk-drive maker Maxtor Corp flagged job losses among its Singapore workforce of 8,000 once a US$115 million plant it plans to build in Suzhou comes on stream in 2005.
But a day earlier Mandarin Oriental Hotel Group said it planned a second upscale hotel in Hong Kong to cater to the growing number of visitors from China.
China already has a voracious appetite for energy, commodities, raw materials and equipment to feed its industrial machine, leading Jim Walker, chief economist at CLSA Emerging Markets, to call it the golden goose of the global economy.
Japan believes China has an unfair advantage by artificially holding down its yuan, which is pegged at around 8.28 per dollar, and wants a revaluation that would curb its exports and thus boost Japan's economy which has been sluggish since the Asian economic crisis of the 1990s.
But Walker argues that would kill the China goose -- cutting China's export income would reduce its demand for imports.
"What would we all rather have -- a moribund but competitive Japan or a competitive and dynamic China? The question is rhetorical because the answer is so obvious," Walker said.
"China is on the move and it is a massive benefit for everyone in the global economy" he said in a note to clients.
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
RECORD-BREAKING: TSMC’s net profit last quarter beat market expectations by expanding 8.9% and it was the best first-quarter profit in the chipmaker’s history Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which counts Nvidia Corp as a key customer, yesterday said that artificial intelligence (AI) server chip revenue is set to more than double this year from last year amid rising demand. The chipmaker expects the growth momentum to continue in the next five years with an annual compound growth rate of 50 percent, TSMC chief executive officer C.C. Wei (魏哲家) told investors yesterday. By 2028, AI chips’ contribution to revenue would climb to about 20 percent from a percentage in the low teens, Wei said. “Almost all the AI innovators are working with TSMC to address the
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”