UMC co-founder John Hsuan divides those who want to participate in the electric vehicle (EV) business into three categories: Traditional car manufacturers such as Toyota and Mercedes-Benz; new carmakers such as Tesla and NIO; and Internet giants such as Apple, Google and Amazon, who have already taken the lead in software-hardware integration and IoV.
So can Taiwan build cars? Can Taiwan find a new business model beyond those three?
Hsuan has pointed out that when Tesla built its Roadster in 2008, it relied heavily on Taiwan's supply chain. Later in 2010, Yulon Motor also built its first EV, and now the most talked about is undoubtedly the three EVs launched by Foxconn (Hon Hai) in mid-October. Foxconn chairman Young-Way Liu vowed that the company will build the whole car, that it will really be released in 2023, and that Yulon will be the first brand customer of Foxconn.
In addition to passenger EVs, lucrative business opportunities are also coming from the bus market: 15,000 public buses and 15,000 tour buses a year worldwide. RAC Electric Vehicles' EACE 150 electric bus is already on the market; Master set up electric bus plants in Saudi Arabia in 2021; and Tron-e is exporing electric mini-buses to Thailand. This proves that Taiwan can not only build cars, but may even take advantage of Taiwan's strengths in the information and electronics industry to develop a fourth business model that can not only produce its own cars, but also help emerging countries co-create and build a new generation of automotive industry.
Taiwan has the most complete supply chain in the world lying along a 200km-stretch of a highway. It can seize the opportunity to develop a car industry from the upstream and downstream links. However, since automobiles involve public issues such as traffic safety and information integration, there are various obstacles that need to be overcome across fields, and it is important to instill the concept into manufacturers through local exhibitions and experimental sites.
Related regulations are now being verified in Taiwan, and sufficient verification data must be accumulated for the self-driving scenarios in tunnels and rainy conditions. At present, the Taiwan government has designated a site where both autonomous buses and cars can be tested in real-life scenarios in northern Taiwan. The self-driving environment is very important for the auto industry, so we can start with buses. Self-driving buses may be on the road sooner, and seven or eight bus companies are currently testing them. In the past, Taiwan's domestic market was supported by brands from other countries, and manufacturers who wanted to make money had to rely on exports. However, the future may be reversed: domestic sales first, and simultaneous deployments for exports - that may be the most important idea to accelerate the development of Taiwan's new generation of industry.
Hsuan has repeatedly emphasized that opportinities come from "chaos." He believes that at the critical moment, the more we do, the better we will be. The government should accelerate the process of industrial development through various policy tools. It may be the story of "The Blind Mean and the Elephant," but Hsuan suggests that if we all "touch the elephant" together, we will get to know it soon. Developing an industry is never an easy task, but compared to other leading countries in the automotive industry in the past, as well as emerging countries that intend to participate in the competition, Taiwan has significant advantages and has already started off a long time ago, thanks to its electronics industry.
Lin Hsin-i, who is known as the Iacocca of Taiwan's automotive industry and who was vice premier of the country, noted that ADAS Level 4 has been permitted to proceed to "fixed-point" operation, and Taiwan has to strengthen its infrastructure. He co-founded the Automotive Research & Testing Center (ARTC) with Yang Shih-chien, allowing export parts and components to be tested in Taiwan. The government's budget for science and technology is NT$120 billion a year, but everyone has a share. This must change, and the thing is it mustn't drag its feet. It is important to become a leader. For example, its plan to install 7,500 charging piles by 2025 should be completed within two years ahead of schedule. It should invest NT$1 billion in two years, rather than NT$1 billion in five years. Resources allocation must be efficient.
Lin urges the new generation of Taiwan's EV industry to move beyond replaceable components to modules. At least it should establish capabilities of rapidly integrating sub-systems, linking the strengths of Taiwan's industry and allowing each company to do what it does best.
(Editor's note: This is part of a series of analysis of Taiwan's role in the global ICT industry.)