HTC’s ballooning share price quickly pushed the smartphone maker’s market value over the NT$1 trillion (US$34.63 billion) threshold last week, replacing Formosa Petrochemical as the nation’s third-largest listed company. As of Friday, HTC had a market capitalization of NT$1.026 trillion, trailing only Taiwan Semiconductor Manufacturing’s (TSMC) NT$1.889 trillion and electronics manufacturer Hon Hai Precision Industry’s NT$1.058 trillion.
HTC is now valued at more than 40 times what it was in 2004, when the company had a market value of NT$25.05 billion. The company’s rapidly increasing sales and profits have also helped HTC chairwoman Cher Wang (王雪紅) overtake Hon Hai chairman Terry Gou (郭台銘) as the nation’s richest person on Forbes magazine’s billionaires list this year, with a net worth of US$6.8 billion.
The market is now waiting to see when HTC will overtake Hon Hai as the nation’s second-largest listed company. More importantly, the emergence of HTC as a star technology company shows how successful companies respond to market changes.
Take TSMC as an example. The global foundry leader is committed to maintaining high value-added manufacturing services for its customers. The company has thrived in the contract chipmaking business for more than 20 years thanks to its continued use of the most advanced process technology available, enabling it to make chips smaller while enabling customers to embed more circuitry on a single silicon wafer.
Hon Hai represents another success story. The company has stuck firmly to its assembly business and serving as a reliable contract partner to major brands such as Apple, Microsoft, Sony and Hewlett-Packard.
With its strong manufacturing capabilities, Hon Hai surpasses its rivals in vertical integration, labor availability and cost control ability. As the company has grown bigger and stronger, it has enlarged its business scale through acquisitions and mergers and sometimes it has even flexed its muscles with clients to maintain profitability.
On Wednesday, Hon Hai was ranked by Forbes as the 189th-largest company in the world on the global top 2,000 list for this year, and the biggest among the 40 Taiwanese companies on the list.
HTC, which Forbes ranked as the 700th-largest in the world and the ninth-biggest in Taiwan this year, offers a different approach to success.
The company, like Acer and Asustek Computer, has drawn attention to how some Taiwanese manufacturers are moving up the global corporate ladder in pursuing brand building, following years of contract-based manufacturing business.
However, not all efforts to develop own-brand business have proven successful. In 2005, Taiwanese electronics maker BenQ had hoped that its takeover of Siemens’ handset unit would help make it one of the world’s leading players, only to find out how difficult it was to achieve that goal and call it quits a year later.
From TSMC to Hon Hai and from Acer and Asustek to HTC, Taiwan’s star technology firms have shown their ability to set corporate strategy by considering not just their own manufacturing and cost-control capabilities, but also an understanding of the structure of the industry and changes in the global economy.
However, companies hoping to sustain their success also need the ability to anticipate industry downturns and to respond aggressively and in a timely manner. HTC’s efforts in offering the best user experience to compete with Apple’s iPhone and Acer’s late response to the emerging tablet market provide a clear message that challenges are always on the horizon and companies have no time to rest on their laurels.
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