Taiwan's leading information and communication technology (ICT) makers' efforts to diversify into the automotive-electronics business recently bore fruit when Ford Lio Ho Motor Co., the local subsidiary of Ford of the U.S., announced it would add BenQ Corp. (a leading computer-peripheral and consumer-electronics maker in Taiwan), and AU Optronics Corp. (AUO) (Taiwan's No. 1 thin film transistor-liquid crystal display (TFT-LCD) panel supplier), to its local auto-parts supply chain.

For BenQ and AUO, doing business with Ford Lio Ho may provide a ticket to entering into Ford's global parts procurement system, with its many lucrative business opportunities. AUO is an affiliate of BenQ, and they share the same chairman, K.Y. Lee. BenQ reportedly tried to develop a similar cooperation project with other local automakers a few years ago, but its project failed due to the large business culture differences between the automotive and ICT/consumer electronics industries.

Ford Lio Ho made its announcement at a recent press conference, where it debuted the updated version of its locally made Tierra Xt compact sedan that includes an in-car multimedia entertainment system developed by BenQ, which has a monitor using a TFT-LCD panel supplied by AUO.

The BenQ system in the new Tierra Xt is the first in-car multimedia entertainment system to integrate an LCD monitor, USB port, SD memory-card slot, Bluetooth capability, and on-screen (3.5-inch) phonebook, in addition to a normal stereo system. The system is also compatible with Apple's iPod portable multimedia players (via a special adapter cable) to enable users to view pictures and listen to music files.

Chang Wei-chang, Ford Lio Ho's vice president of marketing and sales, points out that company president Jeffery Shen was responsible for initiating contacts with BenQ and AUO chairman Lee about possible cooperation. The joint project was immediately agreed upon by the two parties, as BenQ was already actively planning to develop automotive-application systems, and had set up a new business division to handle related affairs.

BenQ, Chang says, immediately sent a group of R&D talents to Ford Lio Ho's development center for the joint development of automotive-electronics products, including the multimedia system in the Tierra Xt.

Chang claims that if the cooperation project with BenQ goes smoothly, Ford Lio Ho does not exclude the possibility of cooperating with BenQ to develop systems for Ford's global supply chain, which now procures parts for about six million new cars worldwide per year.

In addition, the vice president discloses, Ford Lio Ho also played the intermediary role of directing some Ford U.S.A. ranking officials to call upon AUO to discuss the possible procurement of TFT-LCD panels in the future.

In such cases, local carmakers play a vital bridge role in helping auto-parts companies on the island to become suppliers for their foreign technical partners. The first requirement for the local parts companies is that their products have to have been tested in the domestic automobile market.

Another recent example of this trend is Everlight Electronics Co., Ltd., a leading light-emitting diode (LED) supplier on the island. Everlight recently confirmed that it has begun a cross-line cooperation project with the Yulon Group, the largest automobile-manufacturing conglomerate in Taiwan. Yulon operates two carmakers, including Yulon Motor Co., the local builder of some Nissan and GM car models; and China Motor Corp., the local builder of Mitsubishi and Chrysler cars.

Chen Kuo-rong, president of Yulon Motor, points out that a modern car currently uses about 300 LEDs in its tail lamps, third brake light, and instrument panels. If infrared and high-brightness LED technology matures as expected, that number is likely to grow to about 900. About 60 million new cars are sold every year around the world, Chen says, representing a huge market with an annual demand of about 54 billion LEDs.

Chen also claims that Yulon will be a platform that helps local IT and optoelectronics players jump onto the automotive bandwagon because the company has set up cooperation ties with several major international car brands.

Everlight has already developed LED taillights for some luxury Nissan car models produced in Taiwan. According to Kevin Chien, Everlight's assistant vice president, his company's first batch of LED taillights for locally made cars have passed 3,000-hour durability tests and will be brought to market soon after completing a 5,000-hour test.

Everlight is also actively working on LED headlamps, Chien says, with the scheduled release of the advanced products in the third quarter of 2007 in some special-edition car models in Taiwan. For LED headlamps, according to the assistant vice president, the heat-dissipation challenge is more demanding than LED brightness limitations, because engine compartments can generate temperatures as high as 90 to 100 degrees, resulting in a very difficult working environment for LED headlamps.

Nevertheless, Chien stresses, Everlight is working on two solutions for formally commercializing LED headlamps. He adds that increasing LED brightness is a challenge for IC chipmakers, while improving heat dissipation falls to LED packagers.

Taiwan Automakers, ICT Companies' Auto-electronics Tie-ups
Carmaker	ICT Partner	Project Content
Ford Lio Ho	BenQ, AUO	BenQ developed the multimedia entertainment system for Ford's locally made Tierra Xt car model.
China Motor	STI, E-Lead, AMEC etc.	China Motor helped seven local ICT companies to demonstrate their products and technologies to Mitsubishi of Japan.
Yulon Motor	Everlight, Delta etc.	Yulon set up the Hua-chuang Automobile Information Technical Center Co. Ltd. (HAITEC) with its partners to develop auto-electronics products.
Source: The companies.