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Future car trends open door to the "4C" industry

Posted: 02 Jan 2008     Print Version  Bookmark and Share

Keywords:Taiwan's automotive electronics  in-car peripheral devices  UWB in car safety systems 

When you think of cars of the future, what do you imagine?

Apart from vital safety features, cars of tomorrow will have cutting-edge electronic technologies that will improve driving comfort and entertainment. These technologies will also address fuel-saving, low carbon dioxide emission and other environmental protection requirements. More importantly, these trends will open the door to the so-called "4C" industry and give new hope to Taiwan's electronic industry.

Strategy Analysis International predicts that global car electronics market will increase from the anticipated Rs.157,839.88 crore ($40 billion) for 2007 to Rs.239,916.62 crore ($60.8 billion) in 2013, a CAGR of 7.3 per cent, which is higher than automotive engines' (3.8 per cent). Moreover, car electronics' share in the total automotive market is expected to grow from 25 per cent to 40 per cent, and this rosy prospect is enticing Taiwan electronic makers to join the fray.

This new "C", however, has very different features from the 3C industries that are familiar to Taiwan manufacturers. Electronic devices and IC components of the fourth C require several specifications and extremely high quality. Hence, it is not easy to enter this field.

Main target
The discussion on automotive electronics is always a heated one. For the last two years, however, there has been less talk due to the issues of difficult market penetration. Many Taiwan manufacturers had been successful in this field, though. Some of them developed applications for 3C products in cars to enter the automotive electronics industry. They explored the realms of in-car infotainment systems, in-car displays, GPS navigation systems, anti-theft lock, reversing radar, LED lighting and tyre pressure monitoring system among others.

The technologies of these manufacturers focus on the system-level and the design/manufacturing of electronic control units (ECUs), and key automotive IC suppliers are rare. Moreover, chips from many Taiwan manufacturers do not meet the specifications for car use and do not pass the authentication or test procedure of international automakers. Hence, they only target car peripheral devices with pure function or the control fields steering clear of solutions geared toward car safety. This also made it difficult for Taiwan vendors to compete with manufacturers such as Freescale, STMicroelectronics, Renesas and other key players from Europe, United States and Japan.

Market experience and layout policy will be crucial to Taiwan manufacturers' success in their penetration to the international automotive electronics supply chain. The growth of China, India and other countries' automotive market has attracted many international car manufacturers to work with Asian companies and develop car models suitable for the region. If Taiwan companies would be able to work with these international car manufacturers, they would gain experience in the automotive industry and eventually join the supply chain of international car manufacturers.

"Compared with the electronic industry, the automotive industry has very different requirements for quality and material preparation," said Yi-Cheng Liu, president of Hua-chuang Automobile Information Technical Centre (Haitec). "Thus, it's not easy to put together these two industries, and an adaptation period is necessary."

Despite the hurdles that Taiwan electronic companies are facing, Liu believes that there are things manufacturers of the region can do to succeed. One suggestion is for Taiwan companies to enter mainland China's automotive industry. This entry to China, noted Liu, will act as a "springboard" upon which Taiwan manufacturers can take part of the global supply chain. An example is Tung Thih Enterprise Co. Ltd, which has cooperated with an automotive manufacturer in China. The company eventually passed the certification of an international carmaker and broke into the global arena.

International highway
Created by Yulon Motors in 2005, Haitec is an automotive electronics R&D institute that recently collaborated with Industrial Technology Research Institute (ITRI) to develop products with UWB vehicle-safety sensing technology. Examples are intoxicated-driver sensor, which monitors whether the driver is under the influence of alcohol, and automotive active safety system, which inspects the car's environment 360?. They will be key R&D projects. The biggest feature of this technology is that UWB can accurately inspect the breath, heartbeat and other physiological data without direct contact with the driver.

ITRI and Hiatec plan to launch the prototype product this year and eye mass-market release by yearend. With the culmination of these efforts, Taiwan will be able to establish its presence in the global car electronics arena. By taking advantage of its rich experience in electronic product manufacturing and vigorous R&D activities, Taiwan car electronic companies have the potential to shine in the global marketplace.

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