Taiwan's Time to Transform

Taiwan spotlight ILLUSTRATION BY GEOFFROY DE CRÉCY GEOFFROY BY ILLUSTRATION TAIWAN’S TIME TO TRANSFORM The government is betting its manufacturing future on smart machinery and artificial intelligence to improve product quality and flexibility. By Sarah O’Meara

n 2016, industrial engineer Chen-Fu Chien to creating ‘smart factories’ that use an inter- government wants its manufacturing industry was asked to lead a university research connected, digital network of supply systems to change using technologies such as cloud centre in Taiwan that would develop — part of Taiwan’s push to improve the flexibil- computing, big data, the Internet of Things and new manufacturing technologies using ity, quality and efficiency of its manufacturing. smart robots — a shift in industrial practices artificial intelligence (AI). “I am one of the few senior scientists in that has been dubbed Industry 4.0. Once known IRather than aiming to publish academic Taiwan who’s worked extensively with busi- as a hub for mass-produced cheap goods, such papers, his brief was to produce ideas that could ness, as well as in public research. It’s one of as toys and electronics carrying the ubiquitous be quickly transferred into industrial settings, the reasons the government asked me to lead ‘Made in Taiwan’ stamp, the island is looking to says Chien. His research at the National Tsing the project,” says Chien, whose position at science to upgrade its image so it can become a Hua University (NTHU) in Hsinchu City uses the NTHU is endowed by the US firm Micron destination for international companies search- big-data analytics to make machines smarter Technology in Boise, Idaho, which develops ing for futuristic manufacturing solutions. through AI that lets them take decisions without computer memory and storage technologies. In 2018, Chien and his team opened human control. It is one of several approaches Chien’s mission is a sign of how Taiwan’s the Artificial Intelligence for Intelligent

Taiwan spotlight

Manufacturing Systems (known as AIMS) technology firms to diversify their products saw a third revolution in industry involving research centre in Hsinchu. The laboratory and to become more innovative and self-suffi- robotics and greater automation. The next has more than 50 staff members and Chien cient to boost technology ties with the United development, known as the fourth industrial is responsible for 10 related projects in other States and Japan. Taiwan also wants to reduce revolution or Industry 4.0, will use advances in research institutes across Taiwan. It is part of its reliance on mainland China (see ‘Moving cyber-physical systems, such as optical-fibre a wider initiative begun in 2018 that includes money’). sensors on machines. These will collect and three further facilities developing AI technol- exchange data that can be processed by big- ogies in areas such as financial technology, “Companies need to data analytics and AI technologies, enabling health care and intelligent transportation manufacturers to make flexible decisions systems. The whole initiative will cost the make manufacturing about how they operate and to allocate Taiwanese government around US$33 million more intelligent so it can resources efficiently to empower smart pro- over 5 years. be more flexible.” duction. Taiwan is betting that the products “The Ministry of Science and Technology of the future will be made by such intelligent wanted our centre to help create the next gen- machinery. eration of intelligent manufacturing systems Tsai’s 2016 strategy was followed by a Companies around the world are similarly that could only be found in Taiwan,” Chien breakneck series of policy announcements re-evaluating where and how they make their says. The ministry’s aim is “to use the region’s to encourage investment in smart machinery — products, says Jason Ho, general manager of strength in electronics manufacturing to its equipment that can work with less input from Avectec in Zhubei City near Hsinchu, which best advantage and establish Taiwan as a key an expensive human controller — and in other offers conventional manufacturers a software high-tech manufacturing hub”. manufacturing technologies (see ‘Non-stop platform to help create smart factories. In Taiwan’s efforts to change its manufacturing reforms’). these, networked machines can detect their model are timely. A global slowdown in trade When Taiwanese manufacturers began own faults, work more efficiently and reduce since 2011 and a tariff war on goods traded moving factories to mainland China in the production costs. between mainland China and the United States 2000s, it harmed the development of smart “Particularly in high-tech areas such as have pushed companies to look for alternative manufacturing technology on the island, the computer industry, information and manufacturing options that are flexible, effi- explains Stephen Su, who runs a centre at communications technology and consumer cient and unaffected by such economic tussles. Taiwan’s Industrial Technology Research Insti- electronics, companies don’t need to focus tute (ITRI), a government-funded research on making more products more quickly. They Diverse development and development centre in Hsinchu. The need to make manufacturing more intelligent Taiwan has been a leading manufacturer of institute, founded in 1973, has acted as an so it can be more flexible. That way, compa- electronic components since the 1990s. Its incubator for several Taiwanese companies, nies can quickly adjust the product to meet the economy remains reliant on an industry that including the TSMC. demands of each customer,” Ho says. is led by the world’s largest contract electronic Now the government is “pouring resources” chipmaker, Taiwan Semiconductor Manufac- into smart manufacturing “because it’s the Talent base turing Company (TSMC), which supplies tech- future of production”, Su says. Now that Taiwan is remaking itself as a destina- nology companies such as Apple and Huawei A conventional moving assembly line — tion for the next generation of manufacturers, and contributed more than 4% to the region’s many people using tools to complete small there’s one thing it requires more of: talent. gross domestic product in 2018. tasks in a much larger, complex process — was It is in urgent need of experienced engineers, However, the growth of consumer electron- pioneered by Henry Ford to manufacture auto- both to design smart manufacturing technolo- ics has slowed across the world in the past few mobiles in the United States in 1913. Invented gies and to create the high-tech products of the years: many people already have smartphones, at the end of the ‘second industrial revolution’ future, says Su. “We must invest in our scien- and so fewer are being bought. In 2016, Tai- that saw the global spread of technologies tists and engineers. There are many countries wan’s newly inaugurated president, Tsai Ing- such as electrical power, the assembly line is in southeast Asia that are also becoming more wen, announced that the government would still used in many factories today, says Chien. sophisticated in terms of manufacturing, and promote a new model of economic devel- Machines have largely replaced workers to stay competitive, it’s important to make opment. The idea was to encourage local since the advent of the computer age, which investments in education,” says Su.

NON-STOP May 2016 November 2016 February 2017 July 2017 August 2017 Taiwan’s government Launch of the Digital The Smart Machinery The Ministry of Science MOST announces a REFORMS announces its ‘Five Nation and Innovative Promotion Program and Technology 4-year, $132-million TAIWAN’S plus two’ policy — a Economic Development is introduced. It aims (MOST) unveils plans to semiconductor plan to innovate in the Program (DIGI+), an to develop smart- programme to speed POLICIES AIM establish four research fields of biotechnology, initiative to make Taiwan machinery applications up the development of centres in artificial TO BOOST defence, green energy, a smart digital region by by combining AI processor chips, and intelligence (AI). The TECH-BASED intelligent machinery 2025. Policies include manufacturing a 5-year, $517.5-million INDUSTRIES and the Internet of investment in start-up expertise with that initiative will cost strategy to cultivate Things. firms and development from information US$33 million annually AI talent and research of the cybersecurity and communications over five years. (2017 to 2021). industry. technologies.

Mark Liu, chair of the TSMC, says the region’s engineers and managers there.” (The academy factory floor. For safety, the robots are fitted shortage of qualified engineers and other pro- lists these firms as sponsors on its website.) with an electronic skin that has tactile sensors, fessionals could hamper the industry’s devel- Other initiatives will also spur the need which allows the machines to detect workers opment more than technological barriers. for talent. In January 2019, the government nearby and so move away when necessary. Taiwan’s government has acknowledged the announced a programme to encourage Tai- Mechavision’s chief strategy officer and severity of its talent deficit, and in 2018 passed wanese businesses located overseas to relocate founder, Camus Su, says that one of the legislation to help recruit and attract foreign home by offering incentives such as financial firm’s main clients is Taiwanese company professionals to work in Taiwan. Measures subsidies and administrative support. As Qisda in Taoyuan City. It makes a variety of include the introduction of an employment this article went to press, 168 companies had products, including computer monitors and gold card, a type of visa that entitles the holder pledged to return from mainland China. William mobile communication devices, so has opted to tax breaks, pension contributions and flex- Tang, a spokesperson from InvesTaiwan — the for a mixed-line system that allows different ible residency options for family members. Of government agency in Taipei that runs the models to be made on the same assembly the 500 cards that were issued by the end of project — says those companies will together line. The company needs “high flexibility in November 2019, just under one-fifth went to invest $200 billion over three years in industrial order to cope with different product sizes and specialists in science and technology. infrastructure, such as factories, equipment specifications,” he says, “and right now, our Su also points to the 2018 launch of an and telecommunications technology, with an human–robot collaboration system is the best industry-funded organization called the estimated $6.3 billion spent in 2019. way to do this.” Taiwan AI Academy, which started as one of the Min Sun, chief AI scientist at Appier, a 11 project teams at the AIMS centre. It now has From the ground up Taiwanese company that uses AI to help enter- four campuses across Taiwan and runs 12-week Mechavision in Taipei City, a spin-off company prises solve business problems, says that in courses for technical professionals or busi- from ITRI that specializes in industrial robotic one respect, advanced computing technology ness managers working in the field who want arms, is one of those hoping to capitalize on a has helped to transform the region’s industrial to sharpen their skills. “Smart manufacturing growing need for more advanced production model as computers get better at performing with AI applications is one focus for the train- equipment both at home and abroad. complex manufacturing tasks. ing curriculum,” Su says. “Many large manufac- The three-year-old firm makes robotic tactile Unlike in the United States or mainland turing conglomerates such as AUO, MediaTek sensing technology for use where humans and China, where one spoken language is dom- and the Formosa Plastics Group have sent their robots collaborate in close quarters on the inant, Taiwan and its neighbours in southeast Asia operate in hundreds of languages, MOVING MONEY which makes it harder to collect surveys and Taiwan has increased its investment in mainland China over the past three decades. feedback in a large, usable data set for developing new software and hardware, says Sun, 16 who was previously a researcher in electrical 14 engineering at the NTHU. “In recent years, it’s made it harder to gather the market knowledge 12 needed to create new products, such as consumer electronics like tablets or headphones,” 10 he says. “Now, you don’t need so much human 8 resource to convert the information into usable data. AI can understand all the different 6 languages at once.”

Taiwanese investment in investment Taiwanese 4

mainland China (US$, billion) Sarah O’Meara is a writer and editor in London. 2 Publisher’s note: Springer Nature remains 0 neutral with regard to jurisdictional claims in

SOURCE: MAINLAND AFFAIRS COUNCIL COUNCIL MAINLAND AFFAIRS SOURCE: 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 institutional affiliations.

January 2018 February 2018 March 2018 June 2018 January 2019 May 2019 The government rolls Taiwan relaxes The government MOST establishes the Launch of a three-year Taiwan’s cabinet out its three-year AI regulations for the promotes policies to Taiwan Tech Arena to scheme to relocate approves a 4-year, Taiwan Action Plan to employment of incentivize investment support start-ups in AI, Taiwanese businesses $658-million spending establish the island as foreign professionals in start-ups. These aim semiconductors and back to the region. plan for 5G technology an AI leader. It aims to to encourage talent to provide capital, relax software development Policies involve to increase the region’s prioritize AI innovation recruitment. visa and employment and to help them to assisting firms with digital competitiveness. and implementation in laws, encourage local forge international links. resources such as industry during 2018–21 and foreign cooperation land, water, electricity, and invest more than and help investors to labour, taxation and $300 million into the cash in on successes. financing. field.