Taiwan is well-positioned to play a key role in the Internet of Things (IoT) industry given its strength in hardware manufacturing, Google Taiwan managing director Chien Lee-feng (簡立峰) said in Taipei yesterday.
Chien said IoT provides an opportunity for Taiwan to transform thin margins in electronics component manufacturing as it benefits from a shift in the technology industry’s value chain.
“I am not saying Taiwan should abandon hardware manufacturing. Rather, I believe this is Taiwan’s advantage,” Chien said during an IoT forum arranged by the Industrial Economics and Knowledge Center.
“Kickstarters, based in Silicon Valley, face challenges such as estimating the right production scale and scheduling shipments,” Chien said, adding that Taiwanese firms can fill this gap by providing low-cost manufacturing and fast turnaround.
Taiwan has built a strong manufacturing supply chain from chip design to manufacturing and hardware assembly, which should help local firms find new opportunities in the IoT industry, he said.
Mobile chip designer MediaTek Inc (聯發科) is ranked among the world’s top 10 most influential IoT companies, Chien said, citing a survey by Appinions Inc.
Among various IoT applications, smart factories, cars and healthcare devices are potential areas where Taiwan may gain a foothold, Chien said.
To be able to do so, Taiwanese companies, many of which have established manufacturing bases at home and abroad, need to install automation systems and adopt industrial robotics to improve manufacturing efficiency and cope with rising labor costs, he said.
Smart factory is the biggest of the nine major IoT applications identified by McKinsey & Co.
Its production value could reach as high as US$3.7 trillion in 2025, while the overall production value of the nine major IoT applications is expected to hit US$11.1 trillion by that time, McKinsey forecast.
Chien said that component manufacturing is becoming an increasingly critical industry as some components, such as microchips, carry safety risks.
Buyers might ask “which company supplied the chip, or the battery,” Chien said. “Hardware branding is therefore a must.”
Chien cited Google’s new contact lens projects as an example.
The company is working with Novartis AG to develop a smart contact lens that can help people with diabetes measures their blood sugar levels by adding a sensor to the contact lens.
Products such as these require advanced chip packaging skills, he said.
In June, Taiwan Semiconductor Manufacturing Co (台積電), the world’s biggest contract chipmaker, said it was developing a new microchip to dispense medicine by implanting the chip into a person’s blood vessel.
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