{mosgoogle}In Taiwan, the world’s technology hub, government officials and IT executives are pursuing a common goal as they look to set up shop in the lucrative auto electronics market.

As long as automobiles have been around, they have incorporated electronic components. However, in recent years, the percentage of electronic components making up an automobile has been on the rise, as too has the overall percentage of the cost of the car these components account for.

Research from IC Insights shows that in 2002, ICs accounted for roughly 18 percent of the total cost of a car. However, by 2010, IC Insights forecasts that ICs will generate nearly 40 percent of an automobile’s total cost.

Traveling the road of China

Already several of Taiwan’s top electronics manufacturers, including mobile phone maker BenQ, notebook manufacturer Asustek, and the world’s largest EMS manufacturer Hon Hai are driving down the auto electronics road.

According to William Mounger, a senior researcher for THT Research, these companies hope to use China as their springboard into the global auto market. THT Research is a market research firm focusing on China and Taiwan electronics products.

“Taiwan’s IT firms do not have relationships with the top auto manufacturers in the West and Japan. However, as these global car companies push to produce automobiles for China’s 1.3 billion consumers, Taiwan companies can leverage their shared culture and manufacturing facilities on the Mainland to secure contracts,” said Mounger.

Mounger noted that the strategy of these Taiwan companies is to “grab ‘real estate’ on the front dashboard – be it through DVD players or GPS units – and then to expand.”

In time, as the parts offered by Taiwan companies become more important to the operations of the automobiles, cars could in fact be fully equipped with computers – bringing digital convergence to a new level.

Numbers from the Taiwan Transportation Vehicle Manufacturers’ Association (TTVMA) shows that Taiwan is indeed making inroads into the vast China market.

According to statistics from the TTVMA, China was the second largest market for Taiwan auto components in 2005, accounting for a total of 7.69 percent of all exports. Export value for the whole of 2005 reached USD 311 million.

A trillion dollar industry?

Local companies are not the only ones with their eye on the auto electronics sector, as the government of Taiwan and local industry associations have also highlighted the industry as a key for future growth.

This has led some Taiwanese officials to name it the third “trillion dollar industry,” following the existing industries of semiconductors and flat panel displays, which both generate production output of NTD 1 trillion (USD 31 billion) per year.

In early 2006, the Taiwan Electrical & Electronic Manufacturers’ Association (TEEMA) set up an official organization called the Taiwan Automotive Research Consortium (TARC). The main goal of TARC is to provide services and a research platform for auto manufacturers.

With over 120 members, TARC is researching and integrating solutions in areas such as automotive telematics, auto electronics products technologies, market information, industry value chain integration, and motors specification testing standards and regulations.

Additionally, the Taiwan External Trade Development Council (TAITRA), Taiwan’s largest trade organization, this April hosted the world’s first trade show devoted specifically to the auto electronics industry: AutoTronics Taipei.

The trade show saw international 142 exhibitors display their auto electronics solutions. Three theme pavilions, the “Taiwan Car Electronics Pavilion,” the “Human Technology – Intelligent Transportation Systems (ITS) Pavilion,” and the “Yulon Group and its Satellites Pavilion” provided attendees a glimpse of future auto technologies.

Seeing future potential for large growth, all eyes in Taiwan have turned to the automotive electronics industry. Given the track record of Taiwan’s ability to create innovative solutions at low costs, it will soon be a matter of time before Made in Taiwan is found under the hood of the car.

Please visit www.taiwantrade.org.tw or http://taiwaninnovalue.com for more information.