EMS provider Qisda has made efforts to transform operations by acquiring majority stakes in industrial motherboard and computer maker DFI and POS device maker Partner Tech in 2017, and then a 18.37% stake in networking/communication device maker Alpha Networks in first-quarter of 2018. It has also developed smart solutions for city administration, factories, retail operation, medical care, education and business management.
Digitimes recently talked to Qisda chairman and CEO Peter Chen about the company's transformation and future plans.
Q: Qisda has now invested in Alpha Networks. What can be expected of the cooperation between the two companies?
A: Development AI (artificial intelligence) and IoT (Internet of Things) technologies and applications is Qisda's main motivation for cooperation with Alpha Networks. IoT technology is key to Qisda's development of smart solutions and Alpha Networks' R&D capability in networking can complement Qisda in IoT, especially in application of 5G to IoT. In particular, Qisda hopes to cooperate with Alpha Networks to tap markets of IoV (Internet of Vehicles), smart city and Industry 4.0.
Q: What benefits does Qisda expect from its investments in DFI, Partner Tech and Alpha Networks?
A: Qisda's core technological capability is in display, DFI's and Partner Tech's in computing, and Alpha Networks' in connectivity. An integration of the three capabilities can strengthen big data analysis used in hardware/software-integrated solutions. Qisda will cooperate with the three partners to develop IoT-based solutions.
Q: Will Qisda make more investment moves to facilitate its business in 2018?
A: Qisda will continue looking for team up with others that can complement its strength via strategic investments to capitalize on IoT business opportunities and increase corporate value. Investment targets are likely to be small- to medium-size makers of industrial computers and providers of medical care devices or services, and they may not all be Taiwan-based.
Q: What is Qisda's business outlook in 2018? What are the challenges this year?
A: For electronics manufacturing industries, 2018 is a very challenging year: intense global competition; volatile component and material prices; escalating US-China trade tensions; foreign exchange rate fluctuations, etc. Passive components prices have risen 50-60% since 2017 and there have been shortages. The US government is likely to impose Section 301 tariffs on China-made high-tech products and many Taiwan-based makers, as they have factories in China, will feel the impact.
To cope with trade the US-China trade rows, Qisda has upgraded its factory in Taoyuan, northern Taiwan, to Industry 4.0 smart manufacturing with highly automated production lines that can produce diverse models in small volumes. For production of different models, the time taken to adjust production lines has shortened from about 30 minutes originally to up to three minutes. The smart factory features wireless communication-based control of automated equipment and cloud computing-based monitoring of production to hike production efficiency by 30%. Smart warehousing and AGV (automated guided vehicle) systems reduce labor by 70%, and smart environmental monitoring prevents accidents and worker injuries, and increases energy savings by 10%.
If production in Taiwan is subject to Section 301 tariffs, Qisda will shift production to its factory in Malaysia. And if production in Malaysia is also impacted, Qisda will set up production lines in the US via cooperation with local partners.
Q: What are Qisda's product and market strategies in 2018?
A: Qisda will keep adjusting product mix to hike profitability mainly through increasing shipment proportions for high-end product lines including gaming LCD monitors, professional graphics displays, 4K displays and engineering-use projectors.
For medical care, operation of BenQ Hospitals in Nanjing and Suzhou, both in eastern China, is improving. Its subsidiary BenQ Dialysis Technology has begun production of hemodialyzers and will extend marketing from Taiwan to China and Southeast Asia. Its hearing aid supplier New Best will add business stores in Taiwan and tap the markets in China and Southeast Asia.
Qisda had 11-12% of consolidated revenues coming from medical care business and smart solutions in 2017 and the revenue proportion is aimed to rise to over 15% in 2018 and 50% in 2022.
Qisda chairman and CEO Peter Chen
Photo: Shihmin Fu, Digitimes, May 2018
Article translated by Adam Hwang
