The Hindu Business Line : Taiwan sees synergy in working with Indian cos

"We have overlooked India for far too long. It is time to remedy our mistake," is the candid response from Dr G.J. Huang, Executive Vice-President, Institute for Information Industry (III), Taiwan, asked why Taiwan has recently increased its focus on India.

The III is a think tank to the Taiwanese government.

According to him, "We have to focus more on Indian market, in addition to China. Altogether, Taiwanese investments in India have only been about $300 million in the past, including Foxconn's (intended) $110 million investment over five years in Chennai."

He feels that this pales in comparison to the investment that India has received from elsewhere and to Taiwan's investment in China, which is "around $100 billion."

He says this shows that Taiwan has not done enough to treat India as an industrial partner. "Taiwanese and Indian strengths are complementary - India is good in software, services, system development, Taiwan is very good in manufacturing and technologies. Together we can do something."

More than 80 per cent of China's ICT production volume is by Taiwanese companies. "So, you might say that Taiwan controls sort of 80 per cent of that industry.

We can do more to treat India as a business/industrial partner, especially when we are moving from manufacturing to services, hardware to software, and from volume to value."

Why India now? Do Taiwanese companies want to de-risk or is there client pressure? He says, "I think there is a lot of speculation. For example, people say that Foxconn moved to Chennai because of Nokia asking them to do so... . I don't know. Also, Taiwan is looking at India is on a purely business and economic basis and is not political."

Taiwan's areas of focus would be, "Services, digital content, software information services, biotechnology, creative industries."

Interestingly, labour costs are less in India at $ 100 per man month than China's $ 160 (average rates, not skill-specific). Dr Huang clarifies, "Some people complain that the efficiency and effectiveness of the Chinese more than make up for this difference."

In a semiconductor factory or a TFT line, labour cost is important but not critical, he says.

"The quality of the outcome is as important. There, Indian workers, I believe, are quite good."

On foundry investments in India, he says, "I do not know if the situation in India is right for it or not. From our point of view, last year, production value in the hardware sector, computers and peripherals was $90 billion. Less than $15 billion of that is made in Taiwan.

All the rest made by Taiwan in China. Now, Taiwan has the highest density of 12-inch wafers in the world. Gradually, for 8-inch wafers, we have to move to other countries. Most of this now goes to China. Why not India? Why not in other markets to service local demand?"

He also revealed, "I hear that China is now abandoning tax incentives, in general, gradually. They don't need to provide them any more."

Faraday Tech to take up space at Chennai ODC

Faraday Technology Corporation, a $ 175-million, Taiwan-based fables ASIC vendor is set to take up space at the Institute for Information Industry's offshore development centre to be launched on May 16 in Chennai. Of the about 50 seats, Faraday would initially take up about 10.

But would not companies want to seek third party Indian vendors instead of going along with III? Says Dr Huang, "We help promote Taiwan's software and information services industry. India has done a very good job, in terms of processes (CMM level 5 and the like) . We can learn a lot from you."

The centre's engineers would play a very important role in influencing III's software development culture."

The Institute already has 13 Indian software engineers working in its Taipei office. "That has an impact on our software development processes. They also help create an English-speaking environment." Ask Dr Huang why III chose Chennai for the centre and he smilingly retorts: "Why not?" In addition to the usual pluses such as infrastructure and talent pool, he feels the location is ideal. "The location is ideal for optimum work even given air travel.

He explains, "From Taipei, I can make a round trip to Chennai in 48 hours, and still get one working day in Chennai."

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