IoE, Industry 4,0 added IPC demand drivers..............................................
Seeking to become major IoT brand: Q&A with Aaeon chairman YS Chuang
Ninelu Tu, Taipei; Willis Ke, DIGITIMES [Thursday 28 September 2017]
As one of Taiwan's major makers of industrial PCs, Aaeon Technology was back to the capital market in late August 2017, when it was relisted on the local bourse six years after it was acquired by Asustek Computer and delisted in 2011. Over the years, the entire IPC industry has flourished remarkably, driven by the IoT (Internet of Things) and Industry 4.0 trends, and the company has also experienced significant growths and upgrades.
During a recent interview by Digitimes, YS Chuang, chairman of Aaeon, talked about the changes, opportunities and challenges facing Taiwan's IPC industry, the company's changes over the past six years, and its goals after going public again.
Q: How do you see the changes in the IPC industry and market trends?
A: Taiwan IPC players used to focus on factory automation, infrastructures, and vertical markets such as medical care, national defense and transportation. But the emergence of the IoT concept has driven a wider variety of industrial applications for IPC products, and stricter specification requirements will also affect the future development of the IPC industry. Besides, commercial automation will be a new IoT application field, allowing great room for development by IPC makers.
In terms of business models, leading players such as Advantech and Adlink Technology have focused on promoting their own brand products while also handling some medium-size contract manufacturing orders. Smaller firms have mostly relied on small contract manufacturing orders. But Ennoconn's move to focus on contract manufacturing has created certain impacts on traditional IPC makers and generated more collaboration between ICT and IPC firms .
Over the past 3-5 years, acquisitions have increased, gradually changing the business models of the industry. After Asustek Computer announced its acquisition of Aaeon in late 2010, Foxconn has since acquired Ennoconn, which has again made acquisitions of its own. Advantech and Adlink have also purchased stakes in small system integrators or industrial tool suppliers to expand their markets and become more competitive. Moreover, such ICT players as Wistron, Compal and Inventec have also started to engage in deeper cooperation with IPC makers.
There are now more than 30 IPC enterprises in Taiwan, mostly operating on a small to medium scale, leaving much room for acquisitions and mergers among them. Our company is also seeking acquisition opportunities, but the targets will be players in areas where Aaeon's expertise does not lie, such as gaming or POS.
Q: What are the advantages and disadvantages the changing industrial environments will bring to IPC makers?
A: The emerging IoT, Industry 4.0 and smart industry concepts have fueled the development of a greater diversity of IPC products and applications such as commercial automation. In this regard, growing pricing pressure will force globally leading IPC makers to farm out production, triggering flexible demand for small-volume and large-variety production services.
For Taiwan IPC players, growing IoT applications will bring them a bright business prospect, as Taiwan's robust ICT industries and sound supply chain infrastructures will boost domestic IPC makers' competitiveness in the global markets.