Vehicle Technology Trends in Electronics for the North American Market; Opportunities for the Taiwanese Automotive Industry

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The purpose of this study is to conduct a preliminary investigation into the future business potential for automotive electronics, particularly for general Taiwanese companies. Although many Taiwanese companies are targeting China as a growth opportunity, our preliminary investigation was based on North America with the understanding that a more targeted investigation for China could be a future investigation. We recognized that the North American perspective would provide significant input, even to the Chinese market, because many of the auto companies and supplier’s practices and projections are easy to generalize from since they are global.

Our approach was to take a broad, unstructured survey of industry expert opinions and readily available literature in order to grasp a qualitative perspective on the market potential and barriers for suppliers. We interviewed executives from OEMs and tier-1 suppliers to solicit their opinions about market growth, supplier relationships, technology development, and supply chain. The core information in this study came from industry interviews. There were a few areas of discrepancy, but overall there is a strong consensus about automotive electronics:

The growth potential is enormous and represents the single most important area of innovation in the automotive industry today.

The supply chain has well-established expert tier-1 companies with deep knowledge in a narrow range of technologies. Developing complementary technologies is highly desired and there appears to be a strong interest for companies to partner in co-development opportunities

The high value added areas of the market will involve technology development, software and user applications, and systems integration.

The established tier-1 companies and the auto companies voice loud warningsover uninitiated firms (i.e., electronic firms without specific automotiveexperience) entering the automotive supply chain without understanding expectations for research and development relationships, product developmentcycles, product performance requirements and validation, and financialrequirements. None of these factors are a specific problem; however, together they are a significant and sometimes uniquely a big challenge for automotivesuppliers.

No one that was interviewed was aware of Taiwan’s ambitions to transition froma recognized quality electronic hardware and technology provider to a morecomplex automotive technologies and intelligent car systems provider.