A Trade War, the Tech Market, and a Taiwanese Trade Show
July 15, 2019
Advantech CEO K.C. Liu comments on how the U.S.-China Trade War is affecting the technology market, while Computex Taipei vendors shift manufacturing back to the island nation.
The U.S. and China are in the midst of a trade war. You’re surely aware of that by now. These events will have far-reaching, long-lasting implications in nearly every industry, including electronics.
In 2018, China exported the fourth-most electronics in terms of value, capturing 11.8 percent of the total global market. That may not be as much as you would expect, but keep in mind, that’s just in dollars.
According to The Economist, China manufactures more than half of the world’s mobile phones, almost all of its printed circuit boards, and installs 40 percent of the semiconductors on Earth.
For this reason, recent tariffs levied on Chinese goods, including electronics, should give technologists pause. In theory, these tariffs are supposed to encourage individuals and companies to “buy American.” In reality, that only works if the commodities you want to consume are manufactured in the U.S.
Unfortunately, some integrated circuits used in Teslas, control units for GM’s hybrid and electric vehicle drivetrains, and a host of other electronics are not. Yes, certain tariff exemptions have been granted, but not many.
The sum of all fears for Western organizations that are part of the electronics supply chain is that the proverbial manufacturing rug gets pulled out from under them. Meanwhile, the chances of that production coming back stateside are slim to none.
Beyond American and Chinese (depending who you ask) companies, corporations from other countries are now caught in the crossfire.
Advantech CEO: “This trade war really hurt our image in China”
Taiwan has been a major player in the electronics industry for decades now, both in terms of R&D and manufacturing. And, once again, U.S.-China relations are having a significant impact on the country.
K.C. Liu, Founder and CEO of Taiwanese embedded technology giant Advantech, told Embedded Computing Design that anticipation and subsequent fallout from the trade war has “really hurt our image in China.”
“In Advantech’s case, our revenues in China have dropped 10 percent in the past six months,” Liu explained. “Especially in the industrial equipment market, where our business dropped 25 percent.”
But Liu continued that Advantech isn’t the only one suffering in China.
“It’s a common market situation due to the trade war,” Liu said. “In Taiwan, Japan, and Korea, a lot of companies are experiencing negative growth in China. Even companies in Europe are suffering from the slowdown.”
Machine tools companies of all types have experienced a 30 percent decline in their Chinese business, he added.
Across the Pacific, however, many of these companies have experienced a bump – Advantech saw double-digit growth in the U.S. market during the first quarter. While this has stabilized many businesses, concerns have now shifted to maximizing that profit center.
With the U.S. levying tariffs as high as 25 percent on certain items produced in China, many tech firms throughout Southeast Asia are relocating their Chinese manufacturing operations to avoid the extra tax. Popular destinations for this production include Vietnam, Taiwan, and other countries in South Asia.
“We’ve moved some of our production from our China factory to our Taiwan factory because if we make the product in China, we have to pay extra tax,” Liu explained. “If we move the production to Taiwan, we save the tax.
“At 25 percent, we had to move.”
Made in Taiwan 2025? Computex Taipei
Aside from Lisa Hsu’s unveiling of AMD’s 3rd generation 7 nm Ryzen CPUs (which will eventually be headed for embedded markets), the “Made in Taiwan” or “Moving to Taiwan” slogan was a big theme at Computex Taipei 2019. Many vendors around the show were eager to point out their manufacturing facilities on the island, selling potential customers on as much as 25 percent savings on their side of the Taiwan Straight.
Of course, these vendors also have some compelling products to offer. For American tech companies looking to dodge tariffs, some hotspots in Taiwanese tech include memory and storage, industrial computing boards, and artificial intelligence technology.
Here are a few “Made in Taiwan” product highlights from the show.
Memory & Storage
UDInfo Brings High-Bandwidth Data Transfer to Industrial Storage
UDInfo, a provider of embedded NAND and DRAM solutions, was exhibiting its industrial-grade 3D TLC technologies at Computex 2019. These were highlighted by the M.2 2280 PCIe SSD, which delivers capacities of 30 GB to 1 TB and read/write speeds of up to 3450 MBps and 3000 MBps, respectively. Of course, depending on the implementation, it can achieve much more (see video below).
The PCIe Gen 1-3 add-in cards have temperature ratings as wide as -40 ℃ to +85 ℃, and are specified to withstand 1500G shock and 20G of vibration at 80 Hz to 2000 Hz. Along with active power management technologies and SMART disk health monitoring, the devices are well suited to industrial applications that require high-performance data storage and transfer.
Transcend's Taipei SMT Manufacturing Facility Outputs High-Rel DRAM, SSDs
Although not exhibiting at Computex 2019, memory provider Transcend is headquartered in Taipei where it also has a manufacturing facility with 16 SMT lines. The company specializes in DRAM and SSDs, with an emphasis on high-endurance products for industrial use cases.
Here, Transcend offers several different technologies, starting with what it calls "SuperMLC." SuperMLC is a hybrid technology that toes the line between traditional SLC and MLC technologies, providing the endurance and performance of SLC at price points more indicative of MLC. SuperMLC devices are equipped with a specialized controller developed jointly by Transcend and Silicon Motion.
On the reliability side of things, Transcend's SMT manufacturing lines allow for the application of advanced coating technologies. These can be applied as corner bonds or underfills for more robust mechanical bonds between memory components and PCBs, which improve performance under high-stress thermal, shock, and vibration conditions.
ASRock Industrial Quick to Adopt AMD Ryzen Embedded Processors
ASRock is well-known in PC gaming and other consumer electronics markets. However, a new division – ASRock Industrial – develops an embedded portfolio based on a range of popular processors.
For one, the company was one of several embedded board and system manufacturers at Computex Taipei to introduce products based on Ryzen CPUs, which seem to be helping AMD make a comeback in industrial markets. For example, ASRock Industrial's 4X4-R1000 is based on the Ryzen Embedded V-Series SoC, and supports up to 32 GB of DDR4 RAM at 2400 MHz, HDMI and DisplayPort interfaces, as well as M.2 expansion slots.
Along with plenty of embedded connectivity, including 10/100/1000 Ethernet, the 4X4R1000 packs in graphics performance for applications such as kiosks, digital signage, and IoT gateways or endpoints.
Aetina All in on NVIDIA's Jetson Ecosystem
Another relative newcomer to the industrial embedded space is Aetina, a Taiwanese OEM founded in 2012 that is laser-focused on GPGPU computing solutions. To set themselves apart in the crowded compute module market, they have developed a strong parternship with a non-traditional embedded processor vendor, NVIDIA.
While Aetina does develop rugged computing modules to industry standards from the likes of VITA and PICMG, their flagship products are carrier boards for NVIDIA Jetson TX1, TX2, Xavier, and Nano compute modules. To understand the power of this combination, the company showcased an edge AI demo in which people recognition/object classification algorithms were being applied to six simultaneous 1080p video streams.
The demo was built on Aetina's AN310 multi-MIPI CSI camera carrier board for Jetson TX1/2 modules.
AOPEN Integrates on Intel AI Technologies
Taking artificial intelligence into higher volume markets, Taiwanese manufacturer AOpen has turned to a suite of computer vision technologies from Intel. Working with an Australian software partner, AOpen designed an integrated self-service kiosk that is capable of identifying store goods with the blink of a digital eye.
The solution leverages an Intel Core i5 processor based on the Whiskey Lake microarchitecture, Intel RealSense 3D cameras, and the Intel OpenVINO toolkit. While the camera and processor handle most of the heavy lifting that enable the system to automatically and accurately identify specific store items and apply the correct price, the OpenVINO toolkit enables derivative designs and massive scalability.
The OpenVINO development environment optimizes AI algorithms from most frameworks and for processing platforms ranging from CPUs, integrated GPUs, FPGAs, and vision processing unit (VPU) accelerators, meaning that inferencing software can be written once and deployed almost anywhere.
FUD on the Horizon
As the U.S.-China trade war continues, it forces more and more companies to make tough business decisions. Not only does the fear, uncertainty, and doubt make it difficult for organizations in these two countries to continue doing business, it also means that other players in the supply chain must shift their strategies to maximize profits. Manufacturing is just one example of this.
As more and more adjustments are made during this economic stalemate, the harder and harder they will be to undo. But this isn't the first time, and certainly won't be the last, that two economic powerhouses have called each others' bluff. To hear what Alix Lidow, CEO of EPC and the Semiconductor Industry Association's lead representative during the 1986 US-Japan Trade Accord believes we can glean from the past and apply to the current international trade climate, tune into the Embedded Insiders podcast below.