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by Canadian start-up firms. If Taiwanese companies are kept current with this information, this will create Canadian ICT brand awareness of reliable technology which could promote Taiwanese companies and investors to approach or accept a deal with a Canadian company in the future. On the contrary, increased contact with Canadian companies through the
publication of these types of documents will create a Canadian awareness of Taiwanese manufacturers and companies which it can partner with in the future. As reflected in Taiwan’s low level of FDI into Canada, it is important for the CTOT to create investor knowledge and interest in Canada’s ICT industry in order to promote investment into Canada’s ICT industry.
6 Taiwan and Canada Company Level Cooperation
Many Canadian companies and Taiwanese manufacturers already have a diverse range of cooperation. Some Canadian companies have already set up a manufacturing facility or company branch based in Taiwan. Companies who cooperate include Bridgewater with Tatung InfoComm, Wavesat with USI electricity and Compal, Redline with WiMAX, Intrinsyc with Quanta, and Winstron and Absolute Software with Acer. Asus also cooperates with information theft software in Canada. Finally, RIM and Taiwan’s largest
telecommunications services in Taiwan jointly partnered in the manufacturing of the Blackberry (DigiTimes, 2016).
To promote exchanges between Canada and the Taiwan government and academia, the CTOT invited eight ICT leaders from Canada to COMPUTEX TAIPEI forum on “Partnering with Canada’s BEST Canadian ICT leaders” in June 2016. The forum brought together ICT leaders with the Ministry of Economic Affairs, the Taipei Computer Association, Electric Power Association and the Alberta Office in Taiwan. The ICT leaders from Canada included RIM Blackberry manufacturer, Wavesat WiMAX chip company, and Absolute, a well-known information security software company (DigiTimes, 2016).
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6.1 Compal Communications, Inc. (Taiwan) & Wavesat (Canada)
In 2008, the Compal Communications Inc., a leading ODM for handheld devices based in Taiwan, announced that it would partner with Wavesat, a leading supplier of Broadband Wireless semiconductor solutions, based in Montreal, Canada. The companies work together to co-develop products for Compal Communications, Inc.’s mobile WiMAX product line.
The collaboration has provided many new business opportunities and enabled leverage of Wavesat’s multimode Odyssey 8500 4G Broadband chipset, providing access to multiple broadband wireless technologies which include WiMAX Wave2, XG-PHS, WiFi and seamless migration to LTE (Market Wired, 2008).
The benefits of this collaboration can also be seen in the sharp increase of Compal Corporation, Inc.’s stock value during the following year. In 2009, the company’s stock value shown in Figure 22 grew from TWD 16.9 to TWD 48 per stock. The company’s stock value then slowed in 2010 but maintained a healthy value and was at its lowest point again in 2013 with small increased in 2014 and 2015.
Figure 22: Compal Corporation, Inc.’s Stock Value (2007-2016)
Source: Google Finance
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6.2 Quanta Computer, Inc. (Taiwan) & Intrinsyc Software International, Inc.
(Canada)
In 2007, Quanta Computer Inc., the world’s largest notebook computer ODM based in Taiwan entered into an agreement with Canadian company, Intrinsyc Software International, Inc., a global wireless software solutions provider, to license the Soleus mobile handset platform. Quanta began to use Soleus to develop a Third Generation (3G)/High-Speed Downlink Packet Access (HSDPA) mobile device, a breakthrough in the design concept and user experience of wireless communications electronics. Quanta also engaged Intrinsyc’s wireless engineering services to support development and accelerate the product’s time to market (Market Wired, 2007). In 2008, Itrinsyc Software International released the Soleus version 1.50, a software platform for smart consumer phones which allowed Quanta
Computer to release a breakthrough mobile device later that year (Mobile Marketing, 2008).
Since the initial collaboration in 2007, Quanta Computer, Inc.’s stock value, shown in Figure 23, increased greatly in 2009 from TWD 31.60 at the beginning of the year to TWD 71.10 at the beginning of 2010 (Google Finance, 2016), after implementation of the software in its manufactured technologies.
Figure 23: Quanta Computer Inc. Stock Value (TPE: 2382) 2005-2016
Source: Google Finance
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6.3 Tatung Infocomm (Taiwan) & Bridgewater Systems (Canada)
Bridgewater Systems is a Canadian network management technology firm based in Ottawa, Ontario which enables service providers to manage mobile data services, content and commerce. In 2009, the company announced that Tatung Infocomm, a provider of mobile WiMAX services in Taiwan, would be deploying Bridgewater’s market leading WiMAX solutions, Bridgewater Service Controller and Policy Controller. Tatung Infocomm deployed the WiMAX solution in the southern region of Taiwan where it delivered technologies such as Voice over IP, broadband Internet access, enterprise applications, among others. The systems were anchored by Bridgewater’s Subscriber Data Broker to deliver high-speed mobile Internet services to consumers and enterprises (Asia Pacific Foundation of Canada, 2009).
The President of Tatung InfoComm stated that the company selected partnering with the Canadian company because of their proven product capability in market leadership in service and policy control. He further stated that the company would continue to deploy Bridgewater as Tatung InfoComm scaled their network and services throughout Taiwan (CNW, 2009). The partnership between Bridgewater and Tatung InfoComm is an example of how Canadian and Taiwanese companies can work together to apply new technologies. Bridgewater had an established technology which it could share with the Taiwanese company instead of having to develop this technology or one like it within Taiwan.
6.4 Foxconn Technology Group (Taiwan) & SMART Technologies Inc.
(Canada)
In May 2016, the electronics manufacturer, Foxconn Technology Group, entered into an arrangement agreement to acquire all remaining SMART Technologies Inc. shares for USD 4.50 per share. SMART Technologies Inc. is a Canadian ICT company that provides digital whiteboards, collaboration software and interactive displays. In October 2015, SMART
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Technologies Inc. announced that it was seeking potential buyers due to slower than anticipated sales growth and outlook. A representative from SMART stated that the deal would allow the company to tap into Foxconn’s significant resources and global expertise by improving its supply chain and financial stability (Calgary Herald, 2016). As the acquisition will not be completed until its closing in September 2016, results of the proposed partnership cannot be evaluated, however, conclusions can be made from Foxconn’s motivations.
Foxconn is a world leader in electronics manufacturing with many successful acquisitions worldwide such as Japan’s Sharp Corporation. Its desired acquisition of SMART
Technologies Inc. demonstrates the confidence that it has in the Canadian company and its products, and sees potential growth for the future.
6.5 Laipac Technology Incorporated (Canada)
Laipac Technology Inc. is a leading Canadian technology company which specializes in personal emergency response devices. It was founded in 1999 by entrepreneurs Diego Lai and Maria Cristina Pacini. Laipac products have a wide range of applications, from tracing the location of an Alzheimer’s patient and counting the number of passengers on a bus. It exports its products for sale to 80 countries around the world and employs 20 people in its headquarters in Ontario and its office in Taichung, Taiwan (Dawson Strategic and Ciuriak Consulting, 2014).
Laipac opened the Laipac Taiwan office in Taichung in 2004. After some experience manufacturing their products in China, Laipac moved its manufacturing to Taiwan in 2013 which benefitted the company as it could be close to its Taiwan office (Laipac, 2016). The move in production was mainly due to rise in labour costs in China. The founder, Diego Lai, also grew up in Taiwan which allowed him to develop a sense of trust in the country’s manufacturing. He believes that the labour force is committed to a high level of quality and
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communication (Dawson Strategic and Ciuriak Consulting, 2014). By having an office in Taiwan, Laipac has the ability to seek new partners which it looks for in Taiwanese firms within the country. It works closely with distributors and telecom operators and consistently seeks new partnerships in Taiwan (The China Post, 2014).
Laipac’s timeline (See Annex 2) demonstrates a rise in the number of product launches after the company opened its office in Taiwan in 2004. In 2004, it launched three new
products and began to receive business awards in Canada the following year. After moving its assembly and production of products to Taiwan in 2013, the company stated that it was successfully exporting products and software to over 100 countries in 2014 (Laipac, 2016).
The company stated that Taiwan is an important market for their products and a hub through which their products can be sold to the region (Dawson Strategic and Ciuriak Consulting, 2014) which is also reflected in the achievements the company made after the opening of the Laipac Taiwan office in 2004 and new manufacturing location in 2013.
6.6 Taiwan and Canada’s Position on the ICT Global Value Chain
Ciena is a multinational supplier of telecommunications networking software and services. Its technologies support the transport of voice, video and data service in products that include packet networking, converged packet optical, optical transport and various software (Ciena, 2016). Upon contacting one of Ciena’s executives, Kim Roberts (See Annex 3 for communication transcript), for a comment on strategies that Taiwan and Canada could use to develop business relations, his response provided insight on Canada’s and Taiwan’s placement on the ICT global value chain.
Kim Roberts explained Canada’s role in the primary stages of resource extraction and export in relation to circuit board creation. The primary ICT-related resources which it extracts from the ground are copper ore, gold, lead, and platinum which Canada then exports
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to be processed in Japan. A multinational company will then design an Applications Specific Integrated Circuit (ASIC) which incorporates portions of Internet protocol (IP) from the United Kingdom, Italy and France. It is at this stage that the Taiwan Semiconductor
Manufacturing Company (TSMC) competes with other companies around the world such as Samsung in South Korea, Global Foundries in the United States, ST Semi in the Philippines, NEC Corporation and Fujitsu in Japan to manufacture the circuit. TSMC grows the silicon in Hsinchu City, Taiwan which is then exported to the United States to be tested. The ones that are acceptable are further processed in Japan, then Mexico, the Philippines and Singapore.
Once the boards are ready, Canadian software is installed on the boards which are then sent to Taiwan and installed by Chunghwa Telecom. Chunghwa Telecom then sells a 10 Gb/s
Ethernet circuit to Canada (K. Roberts, personal communication, June 11, 2016).
In this example of production, Canada and Taiwan appear at various stages of
production and manufacturing which is imported and exported many times before the final product is complete. This production chain changes as trust is built between companies and governments, and more competitive offers are presented. The connection and business relations that are involved in this chain further extend the web that a single product is
involved. As demonstrated in this example, a country can be involved in various stages of an ICT product’s manufacturing process.
In Robert’s response, he argues that the relationships in the web of production grow and change as trust is built between manufacturers and companies. He states that relationships are not exclusive and warns that third partners which have the goal of creating relationships between companies are an encumbrance to the process of genuine mutual trust and
relationship building (K. Roberts, personal communication, June 11, 2016). Two parties need to have the possibility of recognizing a mutual need and developing a mutual trust. China is not involved at any part of the production process due to a lack of trust. This demonstrates the comparative advantages (Hunt & Morgan, 1995) of strong level of trust, service, quality and
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competitive contracts that Taiwan has over other countries that are not involved in the international production process.