Taiwan forging ahead as IT titan

Scott Tong Dec 16, 2009

Taiwan forging ahead as IT titan

Scott Tong Dec 16, 2009


Steve Chiotakis: A big seller this holiday season is the mini-laptop computer. But the top brand for the so-called netbook isn’t Hewlett-Packard or Dell. It’s Acer, from Taiwan. In fact, this past quarter, Acer became the world’s second-biggest PC seller, just behind HP. It’s a high water mark for Taiwan’s tech sector, but can it go on? From Taipei, here’s Marketplace’s Scott Tong.

Scott Tong: At a computer trade show in Taipei, Taiwan’s computer-makers flaunt their wares. And the leader of the pack is local brand Acer, king of the netbooks.

Lawrence Lin is a company marketing executive:

Lawrence Lin (voice of interpreter): The netbook plays a big role in Acer’s passing Dell to become the world second-bestselling computer maker. Now we’ve introduced a 3D notebook and a touch-screen model.

Acer’s top rival is also from Taiwan; Asus invented the netbook in 2007.

Taiwan has done well for a small island with the population of Maryland. And much of the credit goes to Acer founder Stan Shih.

Stan Shih (voice of interpreter): Promoting Taiwanese brands around the world has taken 30 years, from the calculator to the computer, and now Acer has the potential to become number one worldwide.

Taiwan’s recipe includes the original ingredient of cheap labor; local firms started by making pcs for foreign brands. Then, says political scientist Hsu Szu-Chien, they stirred in lots of engineers trained in the political and tech hub: America.

Hsu Zhu-Chien: We were ally of the center of the world. We were spoiled, we were indeed spoiled.

Sprinkle in government-funded industrial parks, and you have the makings of an IT titan.

But there’s another titan next door. China has already sucked away factory assembly jobs, so Taiwan’s challenge is to create service jobs, like designing computers and branding them. The risk is having good ideas stolen by China, where the mean joke is that R&D stands for “receive and duplicate.”

Mark Forman runs the Taiwan manufacturing firm Marlin and Sons:

Mark Forman: That’s like I lend you my key, you open my door for me, you go ahead and make a copy. And then when you give me my key back, it doesn’t really make a difference does it? Because now you can open that door any time you want.

Play China right, though, and the fastest-growing market in the world equals opportunity.

Skeptics say Taiwanese companies skimp on the research, and are novices at branding. But most here expect the big brands from this little island to retain their edge.

In Taipei, Taiwan, I’m Scott Tong for Marketplace.

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