Emerging markets and technologies are both creating openings for Taiwanese suppliers. China’s burgeoning automotive market is a primary target for companies that focus on OEM sales, while emerging technologies like LEDs and head-up displays (HUD) are also providing opportunities.
China’s many automakers are helping fuel growth for several Taiwanese companies. Car sales are up, and some Chinese automakers are aggressive about adopting new systems like HUD.
“In China, they’re accepting new technologies quickly, we have several HUD projects in China right now,” said Dennis Chen, Sales Manager at E-Lead. “Combiner types will be the mainstream for mid-range vehicles, windshield systems are more for luxury vehicles.”
Taiwanese component makers are also trying to increase their presence in Europe, where transitions to new technologies like white LEDs are creating openings.
“I think we can continue to grow at about 12% in automotive,” said Matt Liu, Automotive Business Unit Director at Everlight Electronics Co., ranked in the top 10 for packaged LED shipments by IHS Markit. “Our main sales are in China, but we’re focusing more on Europe, they’re looking for new suppliers of white LEDs. European countries want warmer colors for low beams than China.”
Other companies are also moving into areas like advanced driver assistance systems (ADAS). Some of these moves into new fields will be highlighted at the upcoming Taipei AMPA/Autotronics Conference in April.
For example, Cub Elecparts Inc., known for making aftermarket tire pressure monitoring systems, is expanding into the ADAS market. Cub purchased Harbinger, a radar integrator, early this year, gaining 77-GHz capabilities. That could help the company expand OEM sales, which currently account for roughly 10% of revenues, according to Lily Chen, Sales Manager at Cub.
Taiwanese companies are often known for low pricing, but many are changing that image by pushing technology forward. E-Lead recently unveiled a HUD system that it says surpass the performance of competitive hardware from a European Tier 1.
“Our combiner system consumes 50% less energy, so 50% less heat is produced,” said E-Lead's Chen. “It’s also 25% smaller compared to Continental, our leading competitor.”
While some suppliers are pushing their technical skills, pricing is always a factor in automotive. LEDs give stylists a lot of flexibility, but many cost-sensitive markets won’t switch from bulbs until pricing premiums disappear.
“Cost is still the biggest barrier for LEDs,” Liu said. “We think the time when LEDs for headlights becoming cheaper than bulbs may be around 2020.”
Pricing is also behind the optimism held by many HUD suppliers. Combiner systems use dedicated screens, so they’re cheaper than systems that shine images onto specially designed windshields.
“About 70% of our sales use combiner technology, about 30% are windshield systems,” Chen said. “Combiners are easier to design in and maintain.”