Report says Taiwan needs to concentrate on mobility

KEEPING PACE::The US-Taiwan Business Council says the sooner Taiwan accepts the new IT world order, the faster it can move forward in an industry it could dominate

By William Lowther  /  Staff reporter in WASHINGTON

Thu, Mar 28, 2013 - Page 14

Taiwan’s past success in the PC industry has left it overly-focused on computers when instead it needs to concentrate on mobility, concludes a new report from the US-Taiwan Business Council.

“The mobile world consisting of smartphones, tablets and other devices is just beginning, yet it is already cannibalizing the PC market,” the report said.

Taiwan could be forgiven for missing the mobility trend — since so many others have missed it as well — but even the death of the nation’s Dynamic-RAM (DRAM) industry has failed to awaken Taipei to the danger.

“The fact is that South Korea moved early and quickly into mobility, while Taiwan has dallied,” the council’s annual semiconductor review says.

REFOCUSING

The report emphasizes that the sooner Taiwan accepts the new world order in information technology, the faster its government and corporations can refocus and move forward in an industry they could dominate.

“The clearest sign that Taiwan remains unclear about the mobile revolution is the lack of 4G telecommunications services on the island,” the report said.

South Korea’s first 4G network went up in mid-2011 and they have developed handsets, Web services, apps and more — far ahead of everyone else.

“To compete in the future, Taiwan needs to refocus its industrial policies on mobility — including getting its 4G networks up and running — so that it can unleash its entrepreneurial population and innovative companies into the fray,” the report said.

In the aftermath of the 2008 financial crisis, South Korea has surged ahead, while Taiwan has “languished,” it said.

LITTLE ECFA BENEFIT

This happened despite the Economic Cooperation Framework Agreement (ECFA) with China.

According to the report, South Korea is now beating Taiwan in China.

“The simple fact is that South Korea has been quicker to latch onto major trends, such as mobility, while Taiwan has rested on its laurels,” the report said.

The most “devastating aspect” of Taiwan’s lack of foresight in mobility so far has been the erosion of a key part of its PC sector — its DRAM industry.

“Signing [the] ECFA, which lowered import duties on many items exported from Taiwan to China, was trumpeted as a victory for Taiwan companies, and it appeared that the door to China-driven prosperity was open,” the report said.

However, Chinese companies have been fierce competitors in their home market and higher-end Taiwanese goods have also faced stiff competition from South Korea.

As a result, Taiwanese companies have not benefitted from the ECFA as much as hoped.

The report stresses that Taiwan needs to move quickly and aggressively to catch up and it needs to do so “right now.”

Taiwan should make its 4G networks a top priority, says the report, and the 4G license auction should be held as soon and as cheaply as possible.