Taipei Times (TT): What is it about India that attracts Taiwanese businesses?
Ong Wenchyi (翁文祺): First of all, the international business community has long kept its interest in the Indian market — one of the so-called BRIC countries [Brazil, Russia, India and China]. Plus, coverage of Indian affairs in Taiwanese media is on the rise. And gradually, Taiwanese businesses, especially those of small and medium-sized [enterprises] before big companies, have come to the realization themselves that the Indian market, albeit difficult to tap into, is an important market.
Most of the businesses [that have entered the Indian market] are mainly from the machinery industry, including shoe-making or textile related ones, the textile industry itself and some other industries ... such as the security or lock sectors.
They have discovered that the India market is a big market in two ways. One, it has very big domestic demand and secondly, its extended markets targeting overseas Indians in the Middle East, Iran and East Africa are also big.
TT: Do Taiwan-made products appeal to Indian consumers?
Ong: Taiwanese products lack publicity in India. That is not to say that Indians do not buy products made in Taiwan. Indian buyers usually have to go through [distributors in] Singapore or Hong Kong to place orders for Taiwan-made products since there aren’t a lot of direct sales points in India for them to place orders. That’s why the Taiwan External Trade Development Council [TAITRA, 外貿協會] has been organizing trade shows [TAITRONICS India, since 2007] to facilitate a platform for Indian buyers to have direct contact with Taiwanese manufacturers.
Taiwan-made products are highly competitive. Many [Indian] buyers and our own manufacturers told me that, in general, the quality of Taiwanese machinery products is 90 percent as good as those of their Japanese or German rivals, but with a price tag 30 percent to 50 percent lower. But the weakness of our businesses is that they don’t have much presence here, which has entitled Hong Kong or Singaporean distributors to a price markup on sales. Nor do Taiwan-made products have enough exposure [among Indian consumers]. So, to promote products made in Taiwan or made by Taiwan in China has become a priority of my trade office.
TT: India’s strength in the IT industry should attract many Taiwanese electronics makers. What has stopped them from entering the Indian market earlier?
Ong: If it weren’t for the recent financial crisis, some of these Taiwanese firms might not have come to India. We face market saturation in southeastern Asia. For example, in Vietnam, with so many Taiwanese businesses there already, there are problems of tight land supply and a shortage of labor. In China, regulatory changes and the new labor contract law, which took effect two years ago, pushed up labor costs and forced Taiwanese businesses to diversify away.
China was also encouraging businesses that tend to cause pollution yet generate less added value to leave. So it isn’t as easy and stable as it was for Taiwanese companies to do business in China, Vietnam or Thailand.
TT: Do you have any tips for Taiwanese companies eyeing India?
Ong: Not every business can succeed in India as there also present risks. But those that are persistent will find a way out. As more Taiwanese companies enter [the Indian market], there will be a cluster taking shape. Taiwanese products will be best-known to Indian consumers as “good products with reasonable prices.”
India, whose domestic market is still growing, also presents lots of opportunities as it remains one of the few economies little affected by the global economic slowdown.
We’ve seen annual 10 percent to 12 percent growth in trade between Taiwan and India in recent years and expect to see greater growth in coming years on closer trade ties. But I would recommend export-oriented businesses to stand down unless you are as big as [shoemaker] Pou Chen Group [寶成集團] or Foxconn International Holdings Ltd [富士康], with secured orders.
Focus on the domestic market, where demand will skyrocket in the next decade. And secondly, set up your own network of [Indian] distributors who understand the markets in its 28 states ... Also, localize your management team with a number-based goal to allow Indians to manage — as experience of successful Indian subsidiaries of Taiwanese companies such Acer Inc [宏碁] has shown.
Send Taiwanese executives who understand the products to service Indian distributors. Overall, electronic machinery, public infrastructure ... and agricultural reprocessing businesses stand a better chance of excelling.
China has claimed a breakthrough in developing homegrown chipmaking equipment, an important step in overcoming US sanctions designed to thwart Beijing’s semiconductor goals. State-linked organizations are advised to use a new laser-based immersion lithography machine with a resolution of 65 nanometers or better, the Chinese Ministry of Industry and Information Technology (MIIT) said in an announcement this month. Although the note does not specify the supplier, the spec marks a significant step up from the previous most advanced indigenous equipment — developed by Shanghai Micro Electronics Equipment Group Co (SMEE, 上海微電子) — which stood at about 90 nanometers. MIIT’s claimed advances last
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has appointed Rose Castanares, executive vice president of TSMC Arizona, as president of the subsidiary, which is responsible for carrying out massive investments by the Taiwanese tech giant in the US state, the company said in a statement yesterday. Castanares will succeed Brian Harrison as president of the Arizona subsidiary on Oct. 1 after the incumbent president steps down from the position with a transfer to the Arizona CEO office to serve as an advisor to TSMC Arizona’s chairman, the statement said. According to TSMC, Harrison is scheduled to retire on Dec. 31. Castanares joined TSMC in
EUROPE ON HOLD: Among a flurry of announcements, Intel said it would postpone new factories in Germany and Poland, but remains committed to its US expansion Intel Corp chief executive officer Pat Gelsinger has landed Amazon.com Inc’s Amazon Web Services (AWS) as a customer for the company’s manufacturing business, potentially bringing work to new plants under construction in the US and boosting his efforts to turn around the embattled chipmaker. Intel and AWS are to coinvest in a custom semiconductor for artificial intelligence computing — what is known as a fabric chip — in a “multiyear, multibillion-dollar framework,” Intel said in a statement on Monday. The work would rely on Intel’s 18A process, an advanced chipmaking technology. Intel shares rose more than 8 percent in late trading after the
FACTORY SHIFT: While Taiwan produces most of the world’s AI servers, firms are under pressure to move manufacturing amid geopolitical tensions Lenovo Group Ltd (聯想) started building artificial intelligence (AI) servers in India’s south, the latest boon for the rapidly growing country’s push to become a high-tech powerhouse. The company yesterday said it has started making the large, powerful computers in Pondicherry, southeastern India, moving beyond products such as laptops and smartphones. The Chinese company would also build out its facilities in the Bangalore region, including a research lab with a focus on AI. Lenovo’s plans mark another win for Indian Prime Minister Narendra Modi, who tries to attract more technology investment into the country. While India’s tense relationship with China has suffered setbacks