Japanese companies utilizing Taiwan's advantages for R&D

December 18, 2006

(The following is a feature report from the Economic Daily News)

Taiwan is proving to be a fertile R&D ground for companies such as Sony, NEC, and Fujitsu -- three Japanese companies which have formed R&D centers in Taiwan in recent years. "Win-win" partnerships are being created, as the resources of Taiwan OEMs and other IT businesses are combined with the global branding and marketing power of Japanese companies.

Sony, which originally committed to operate a R&D center in Taiwan for three years, has applied to continue its operations in Taiwan. As the company's R&D is shifting to its popular LCD televisions and digital cameras, Taiwan OEMs are expecting a significant increase in orders for these products. This time around, Taiwan OEMs are likely to receive orders for entire LCD TV sets, having previously only supplied LCD screens.

The success of Japanese companies in the global market for consumer and IT electronics products is closely linked to a unique system in which these companies develop their own components.

For example, the components, circuitry, and audio-video systems for Sony's Bravia TV were each developed separately, a process which distinguished Bravia's development from other products. By expanding global outsourcing, e.g, procuring flat panel screens in Taiwan, Sony was able to develop Bravia efficiently and quickly, and in doing so, it cornered the supply market to capture a higher market share and profit margin.

NEC, Japan's largest computer manufacturer, recently formed a new product innovation and R&D center in Taiwan. NEC has adopted a joint R&D model for working with Taiwan IT businesses, and in a short time initiated product development and mass production. This is another example of a win-win partnership, as NEC focuses on software, information appliances, computers, and server products in Taiwan.

Fujitsu -- the world's third largest and Japan's largest IT and services group -- formed an R&D center in Taiwan to work with local manufacturers to jointly develop business opportunities in RFID technology, vein identification technology, medical and health care products, elderly care, and logistics. In addition, the company will be increasing its cooperation with Taiwan companies in systems integration services. Drawing from its experience in Japan for R&D in Taiwan, Fujitsu is establishing a foothold for development of the greater China market.


(Economic Daily News)

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