Mon, Jun 04, 2001 page20

• Mitac head says Taiwan, China can cooperate in IT

  COLLABORATION Recognizing that Taiwan has a shortage of manpower in the high-tech sector, Matthew Miao thinks there are mutual benefits to be gained from working with China

  • By Kevin Chen / STAFF REPORTER
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  While the outlook for the global high-tech sector has soured over the past year, Matthew Miao (苗豐強), chairman of the Mitac-Synnex Group (神通聯強集團), says both Taiwan and China can collaborate on information technology and together tap emerging business opportunities.

  "The strength of Taiwan's IT industry is that we have good engineers, good channels and a good sense of business networking that integrates our businesses globally. But our weakness is that there is a shortage of manpower," Miao said last week while speaking to foreign journalists in Taipei.

  Miao suggested Taiwan could use supplementary brainpower from China. "I realize that there are some political problems between Taiwan and China. But it is important for both sides to find a common ground where we can work together to complement our [mutual] strengths," he said.

  

  Matthew Miao, chairman of the Mitac-Synnex Group.

  PHOTO: CHEN CHENG-CHANG, TAIPEI TIMES

  "Combining Taiwan's business expertise, entrepreneurial management skills, global channels and business integration abilities with China's vast land and abundance of engineers, I think a lot of potential and good opportunities [exist in China] for Taiwan to continue to succeed in the world's IT sector," Miao said.

  The Mitac chairman said that while Chen Shui-bian's (陳水扁) government is very supportive of the IT industry, "just by saying that [we want a strong] IT industry -- without solving those [infrastructure] problems -- doesn't help," Miao said. He said that the government needs to help the industry resolve the problems of land acquisition, a stable electricity supply and an adequate talent pool.

  Indeed, the support is relevant to Mitac International Corp (神達電腦), a listed firm in Miao's group, as in late May officials said they would accelerate the construction of a manufacturing center in Kunshan near Shanghai in China. Mitac has also rescently established a joint venture maintenance and repair center in Shanghai, according to Mitac Vice Chairman Francis Tsai (蔡豐賜).

  Currently Mitac has a plant in Shunde in Guangdong Province, which can produce one million PCs per month. But since the Shunde plant has now reached full capacity, the company's Kunshan facility will be its second manufacturing center in China. Mitac hopes to ship eight million desktop computers from that location this year.

  In addition, the launch of the Kunshan center will help Mitac develop electronic manufacturing services to further integrate their production of computer cases, power supplies, printed circuit boards, motherboards and related software development there.

  "Shanghai has become an industrial production center," Tsai noted. "Many foreign buyers will scramble to the city for one-stop shopping. To facilitate the needs of foreign customers, we are considering relocating our low-end production lines from Linkou in Taipei County to Kunshan."

  However, the Taiwan government still bans certain China-bound investments by high-tech companies, including notebook computers and semiconductors. Also, the government forbids Chinese engineers from working in Taiwan.

  While no one knows for sure the full impact on Taiwan's economy if China-bound investment restrictions are removed -- freeing up billions of dollars in capital and sending high-tech experts across the Strait -- Miao said that Taiwan "is moving too slow" in this direction and the government should let the private sector decide what's best for it and not impose investment restrictions. "It is up to the private sector, not the government, to tell you how to run your business model," he said.

  That business model -- in which Mitac has invested a lot in building up its infrastructure on the Internet -- has helped it grown into one of the world's leading technology conglomerates, with business ranging from chemicals for electronics, design and manufacturing, Internet technology to mobile solutions, as well as distribution and customer demand fulfillment.

  But Mitac's progress based on their business model was not achieved painlessly. In fact, in view of fierce competition in the IT business, the company in early 1990s converted its business strategy from manufacturing products under its own brand name into the build-to-order or configuration-to-order areas of manufacturing.

  "Nine years ago, we made a painful decision to give up our Mitac brand name in computer products. [But] we saved about US$15 million at that time per year, which allowed us to pour a lot of money in R&D and into strengthening the infrastructure necessary to our business model," Miao said.

  He said that the company will still retain Mitac as its company name as it wants to become a globally renowned brand in the IT sector -- just like the Taiwan Semiconductor Manufacturing Co (台積電) in the made-to-order chip business. "Some companies invest in brand names. We invest in R&D and manufacturing. But we like to invest in companies that invest in brand names," Miao said.
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