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Taiwan Multinationals Serving a Broader Role

Semiconductor Support – In plants like this one, Dow provides materials needed by high-tech customers in Taiwan and abroad.

For many foreign-invested firms, looking after the Taiwan market is not the only way they contribute to their parent companies.

Despite its medium-sized population of 23 million people, Taiwan has come to play an outsized role for multinational corporations in certain industries. And as a number of AmCham Taipei member companies have discovered, a presence in Taiwan may not simply provide valuable market entrée or a highly effective manufacturing base. It can also lead to other opportunities in support of the global or regional business plan of the parent company. Below are just some examples of the Taiwan operation’s significance for some major players.

Air Products

Taiwan’s powerful semiconductor industry makes this economy a vital market for Air Products, a Pennsylvania-based company specializing in industrial gases and materials technologies. Air Products has been operating in Taiwan for 30 years, since joining forces in a joint venture with the San Fu Gas Co. (rebranded as Air Products San Fu since 2005). The company provides a wide range of industrial gases, materials, and technologies to Taiwan’s crucial semiconductor sector, as well as to such other industries as oil refining, chemical production, and food and metal processing.

The electronics materials division, as part of the larger materials technologies business, specifically provides process materials, advanced precursors, Chemical-Mechanical Planarization (CMP) slurries, and cleaning chemistries to semiconductor manufacturers.

Air Products works with industry partners both in Taiwan and globally to develop enabling materials that help ensure the continued advancement of leading edge semiconductor technologies. “We pride ourselves on making semiconductors faster and more power-efficient by collaborating not only with our Taiwanese end customers, but also users around the world,” says Edward Shober, vice president of Advanced Materials at Air Products. These cutting-edge innovations have helped permit the continuous reduction in process node sizes measured in nanometers.

As Taiwan has emerged as a global leader in semiconductor production – it now accounts for 60% of the world’s foundry capacity, for example – Air Products has been increasing its focus on the Taiwan market. “Taiwan’s position as a leader in this field creates an opportunity, but also heightens the importance of ensuring that our electronics materials division continues to have the capability in place to provide customers with a reliable and sustainable supply of materials,” Shober explains. To meet the challenge, he notes, manufacturing capability must be supported by “local research and development, applications engineering expertise, and supply chain and quality expertise.”

Shober reports that the company plans to expand its presence in Taiwan’s science parks in order to be closer to its major customers. “The goal is to have Air Products resources working on and solving customer challenges around the clock, 24/7,” he says.

With US$10.5 billion in revenue in 2014, Air Products ranks no. 284 on the Fortune 500.

AllianceBernstein Investments

A world leader in investment services, New York-based AllianceBernstein (AB) first entered Taiwan’s asset management market in 2001 and expanded its presence a decade later by acquiring Taiwan International Investment Ltd. The merged company, rebranded as AllianceBernstein Investments Taiwan Ltd. (ABITL), offers investment research and investment management, as well as fund distribution.

The high degree of personal wealth in Taiwan and the penchant of Taiwanese investors to seek a diversified international portfolio has provided substantial opportunities for growth in this market. According to an October 2014 report by the journal Asia Asset Management, “AllianceBernstein Investments Taiwan has become the island’s largest offshore asset manager following a strong market response to its high-yield bond fund.” The report cited figures from the Securities Investment Trust & Consulting Association (SITCA) showing ABITL with total assets under management (AUM) of around NT$540 billion (US$18 billion) as of the end of July last year, putting it at the top of 44 offshore fund master agents. As of end of July 2015, the level of AUM in Taiwan stood at NT$592 billion (US$18.5 billion) in offshore funds and NT$107 billion (US$3.3 billion) in onshore funds. The firm currently offers 26 offshore funds, nine onshore funds, and 10 discretionary mandate investments.

With the Taiwan business volume exceeding that of the company’s operations in such other nearby markets as Australia, Hong Kong, Singapore, and Korea, Taiwan consequently plays a prominent role in the firm’s broader Asia business plans. “Asia is the fastest growing part of the whole world, and Taiwan is the most important part of the region,” says Derek Yung, Senior Managing Director of AllianceBernstein in Taiwan. “We give it double importance.”

The concentration of wealth in Taiwan makes it a “big enough market for new products and also for more accessible services to be launched,” says Yung. While Hong Kong has been a longer-established base for financial services, Taiwan has four times the population of the former British colony, causing it stand out as a market to watch for companies like AB.

AB plans to continue to grow its footprint in Taiwan to meet growing demand for financial services. Recently it has particularly been expanding its repertoire of onshore funds. “In Taiwan right now, the majority of customers are buying US-dollar funds, but that is likely to gradually change to a preference for Taiwan-dollar funds,” Yung says. The company will also be expanding its onshore renminbi fund business, as the importance of the Chinese currency continues to grow in the region and around the world.

AB and other asset management firms have also been responding to the vitality of the Taiwan market by cultivating more talent here and using it as a base for some functions previously performed elsewhere in the region. “We see this as healthy progress, as it benefits both the global firms and the local industry,” says Yung.

Globally AB had US$486 billion in AUM as of July 2015.

Corning Display Technologies

Corning has a long history in Taiwan, beginning in 1971 with an operation to make the glass for TV picture tubes. In 2000, Corning founded Corning Display Technologies Taiwan (CDTT), making Corning the first LCD glass substrate producer to open a manufacturing base in Taiwan. Since then, Taiwan has become a core manufacturing base for Corning, which is the largest foreign manufacturing investor in Taiwan’s economy.

In recent years, Corning Taiwan has also been engaged in research and development due to the founding in 2006 of the Corning Research Center Taiwan (CRTC) on the Hsinchu campus of the Industrial Technology Research Institute (ITRI). In 2011, the parent company established the Corning Advanced Technology Center (CATC) in Taipei to serve as its regional office for flat glass technologies, highlighting the importance of Taiwan to Corning’s regional and global strategy.

Corning attributes the strength of the Taiwan operation to its highly skilled employees. Its two large manufacturing plants in Taiwan – one in the Central Taiwan Science Park and the other in the Southern Taiwan Science Park – are the two most efficient Corning factories in the world in terms of yield. At these plants, Corning manufactures thin-film transistor LCD (TFT-LCD) screens for use in computers, televisions, and mobile phones.

Following Taiwan’s success in such other high-tech industries such as semiconductors and information technology (IT) hardware, the LCD flat panel sector that Corning serves has become one of the island’s most important industries. “For Corning,” says Communications Manager Shao-kang Lee, “involvement in Taiwan’s TFT-LCD industry has been a terrific way to utilize the talent here and capture a significant share of the high growth in this sector on a global scale.”

Corning is no. 297 on the Fortune 500, with 2014 revenue of US$9.7 billion.


Although Dell maintains sales branches in Vietnam, Japan, and China, its Taiwan Design Center (TDC), established in 2002 to develop and design laptops, desktops, servers, and data center solutions, is the company’s only such design facility in the region. In the past year, the mission has been expanded to encompass the tablet and software sectors and to start exploration of the Internet of Things (IoT).

Employment at TDC currently exceeds 1,000 personnel. According to the Dell Taiwan website, the Center is responsible for the development and design of all of Dell’s data solutions, nearly 70% of server development, and 100% of notebook and desktop development. As a result, Taiwanese developers have the opportunity to put their creative mark on Dell products and solutions.

Aside from the high-quality engineering talent available on the island, another key reason for Dell’s choosing Taiwan as the location for the center was the powerful IT sector already present here, giving the company’s local talent the stimulus of operating within a vibrant IT ecosystem. “Clearly this is a place where you can work with great partners and get exposed to a lot of good ideas,” says Jeff Lu, Corporate Director and Site Lead of the TDC.

TDC’s success lies in the talent of its local personnel and their ability to think creatively to both design new products and modify old ones. “Our investment now is in helping that talent to thrive because people are really the center of the universe in product design,” says Edward Yardumian, Managing Director of Dell Taiwan.

Dell is also heavily involved in procurement from Taiwanese suppliers, although as a private company it does not disclose its financial information. Before going private, Dell was no. 51 on the Fortune 500 in 2014, with 2013 revenue of US$60 billion.

Dow Chemical

For Dow Chemical, which currently ranks no. 48 on the Fortune 500, the Taiwan operation’s US$630 million in revenue accounts for just 1.1% of the company’s total sales. “By the numbers, it’s very small,” says Dow Taiwan General Manager JR Chen. “However, some of the business we have in Taiwan is highly strategic.” Because of the excellent engineering capability of the Taiwan staff, says Chen, Dow has come to rely on the Taiwan subsidiary to produce a number of high-value specialty products for the global market.

One such strategic product is the chemical mechanical polishing (CMP) pads necessary for semiconductor manufacturing, a sector vital to Taiwan’s economy. Dow has three major CMP manufacturing and technical centers around the world – in Newark, Delaware; Kyoto, Japan; and Hsinchu, Taiwan – located close to major semiconductor manufacturing centers to provide timely support. CMP pads from the Hsinchu factory are in high demand around the world because of their excellent reputation for quality, says Chen.

Dow Taiwan’s contribution to the parent company extends to personnel training. A lot of managerial and engineering talent developed in Taiwan have gone on to serve in other locations, particularly within the Asian region.

“Taiwanese employees are quite creative,” says Chen, noting their ability to continuously make incremental improvements in products and processes that wind up having significant value. “For example, our four plants in Taiwan each started out making a small number of products, but now they are able to produce more than 50 products in one plant. Today our award-winning facilities share best practices in safety and operation excellence not only within the local community, but with manufacturers on a global basis.”


On The Assembly Line – The Taiwan joint venture is one of the earliest Ford operations to be established in the region.

Through its joint venture the Ford Lio Ho Motor Co., Ford has been a major player in Taiwan’s automotive market since 1972. “Along with Australia, Taiwan is one of the markets in the Asia Pacific that Ford has been in the longest, so it’s very natural that as the company has grown in the region, it has drawn talents from those mature markets to take advantage of their capability and experience,” says Thomas Fann, the president of Ford Lio Ho. Currently about 43 personnel from the Taiwan operation are serving in China, both in the Greater China headquarters in Shanghai and in Ford joint ventures on the mainland – and several other Ford Lio Ho “alumni” are in Thailand. The first wave went to China in the early 1990s when Ford was first preparing to enter that market. At that time, the company put together a special team composed of employees from Taiwan and Chinese-speaking talent recruited in the United States.

Taiwan has also served as a base for numerous pilot projects that could be adopted by other operations in the region once proven to be workable. For certain projects Taiwan is the preferred testbed because “this is a relatively mature market and its infrastructure is ahead of most of the countries in the region,” says Fann. “Its size is also an advantage – geographically not so big or complex – and the Taiwan customer is very sophisticated and tech-savvy.”

One business initiative that was tried out first in Taiwan was the offer of an extended warranty, enabling car owners to purchase a package to continue the service when the original three-year warranty is about to expire. Another example was Ford Lio Ho’s pioneering role in creating Ford’s first vehicle modification center (VMC) in Asia.

“Many customers want special accessories to dress up their vehicle, but in the past it wasn’t easy for them to obtain certified parts,” explains Fann. “Through this project we started to accelerate the accessory development process. Now customers can buy various different packages of upgraded accessories with the assurance that they are certified, enhancing the customer experience. Out of hundreds of different combinations, they can pick just what meets their individual taste.” The VMC model has since been adopted by other Ford operations around the region.

Number nine on the Fortune 500 list, Ford had worldwide sales of US$144 billion last year.


The only U.S.-based manufacturer of dynamic random access memory (DRAM), Micron has played a key role in Taiwan’s memory-chip industry since acquiring a 35.5% share in 2008 in Taiwanese memory manufacturer Inotera Memory, a joint venture with Nanya Technology Corp. of the Formosa Plastics Group. Micron’s stake in Taiwan increased dramatically in 2013 when it acquired the Japanese DRAM company Elpida, taking over Elpida’s manufacturing facilities in this market.

Combining the Inotera and former Elpida resources, Micron is now the dominant player in the design, manufacturing, and sales of memory products in the Taiwan market, and Taiwan accounts for a large share of the company’s global capacity. Micron calculates that it is now the second-largest employer among foreign-invested companies in Taiwan.

“We’ve gone from maybe 50 people at the start to some 5,000 at this stage,” says C.W. Chin, Managing Director of Public Affairs for Asia.

For the future, Micron plans continued growth in Taiwan, including the provision of custom-made products to domestic customers and further development of the supply chain supporting its DRAM fabrication operations.

Boise, Idaho-based Micron had US$16.4 billion in sales in 2014 to rank it as no. 190 on the Fortune 500.

Procter & Gamble

P&G – whose portfolio includes such famous consumer brands as Olay, Head & Shoulders, VS, Pantene, Gillette, Braun, Oral-B, Pampers, and Tide – this year celebrates its 30th year in Taiwan. As a sign of this market’s continuing importance for the company, P&G in 2012 opened a new distribution center in Taoyuan County, the largest Fast Moving Consumer Goods (FMCG) distribution center in Taiwan.

Taiwan serves as an important bridge between Western and Asian markets, says Ajit Nayak, P&G Vice President for Greater China and Country Managing Director for Taiwan, Hong Kong, and Macau. Describing Taiwan as a good “learning market,” Nayak notes that it acts as a useful testing ground for products before they are launched in other nearby markets, notably China. “If the company wants to try new things or launch new things [in the Greater China area], then typically we do that first in Taiwan,” he explains. “It’s an easy and cheap way of determining whether we have the right proposition and the right marketing before we spend a lot of money trying to launch it in China.”

One example of this role was the introduction to the region two years ago of a new formulation of the Whisper brand of feminine hygiene products. Called Whisper Pure Skin, the product was launched first in Taiwan within the Asian region to take advantage of this market’s benefits as a test bed.

Another significant contribution that the Taiwan operation has made over the years is the supply of talent to support P&G’s activities in China and other markets. Given the company’s three decades of presence in Taiwan, P&G has been able to cultivate a large pool of experienced marketing and managerial personnel (who have the added advantage of being Chinese-speaking and easy to adapt to working in other Asian markets) that can be called on to serve in other locations.

With 2014 revenue of US$84.5 billion, P&G currently ranks in 32nd place on the Fortune 500.

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