Taiwanese electronics manufacturers have been frustrated by the long-standing hierarchy and the closed loop in the automotive industry.
Taiwan is famous for manufacturing semiconductors and electronics for big brands like Apple, Intel, Nvidia and there are large manufacturers such as TSMC and Foxconn. But there are also many mid- and small-enterprises stashing market shares in auto industry, making car seats, car interiors, air cons, connectors and heat radiators and others without drawing much international attention.
They are the hidden champions who now have a chance of walking out of the shadows of the giants.
Tesla's and Lucid's disruptions to the long-standing hierarchy in the auto industry has again given hope to Taiwanese players. Taiwan has matured in building ICT products and is now anticipating to break down the wall erected by car OEMs. Most expect to produce car electronics for EVs in the way they have been producing smartphone and notebooks.
Foxconn, for one, is taking high-profile and high-speed actions in creating space in the automotive industry, building or having plans to build EV and EV components in the US, India and Indonesia.
Delta Electronics has long worked on developing EV chargers and car electronics. It has undergone many projects in the US and expects to reveal more exciting news, sources said.
Pegatron's former CTO Steve Huang said at the Taiwan-US Hi-tech Forum held on November 4 that the industry has now realized that they do not have to rely 100% on China, and due to the ongoing geopolitical tensions, manufacturers have been shifting investment from China to South Asia and Southeast Asia, including Vietnam and Malaysia. So have American carmakers.
Notably, American OEMs want to have suppliers produce close by. Many suppliers whose main clients are American OEMs have therefore started investing and building manufacturing sites in Mexico and the US states of Michigan and Texas, Huang said.
The 'carmaker culture'
Huang pointed out that the disadvantages of Taiwanese suppliers, if any, would be the language barrier and their ways of thinking in terms of building electronics rather than automobiles.
Pegatron began developing automotive components six years ago, and at the beginning its salespeople and the representatives from OEMs were simply not on the same page during the negotiations, Huang said. The two sides basically had different cultures, and "talked things from really different angles."
To solve this issue, Huang said the salespeople have grown "more and more fierce" and yet stayed "humble," learning from the OEMs and the automotive tier-1 suppliers, Huang added.
Though carmakers are mostly attached to suppliers located in the Bay Area, California, he believes Taiwanese companies can provide and create larger values for OEMs.
"I'm still very optimistic about expanding the EV business for Pegatron," he said.
Pegatron is currently working with a display supplier to provide electronics-integrated displays and e-cockpit systems for electric buses. The project is expected to launch soon in Taiwan.
Pegatron senior VP and former CTO Steve Huang Credit: DIGITIMES