Taiwan’s Technology Secrets Come Under Assault from China

https://www.wsj.com/articles/taiwans-technology-secrets-come-under-assault-from-china-1530468440

by peter_retief • 8 years ago

130 59 8 years ago

weiming2• 8 years ago

Taiwan may end up in a difficult spot in the coming decades unless they embrace production of distinctive (non-commoditized, like "iPhone" vs. "generic smartphone") consumer brands, or step up their efforts in software.

Its current strengths are in the stuff that exists inside the products we use every day. Think semiconductors and other hardware components. However, that know-how is being commoditized rapidly. China is catching up. Japanese multinationals like Sony are also eyeing the same, gradually stepping away from competing on low-margin consumer products.

For Taiwanese consumer electronics, you have brands like HTC, ASUS, Acer, or even a niche newcomer Gogoro (electric scooters). Sizeable, but not agile enough to take on players like Xiaomi.

And the software scene is unfortunately not very bustling despite the government's repeated efforts to pour money into startup hubs and coworking spaces. This is what Taiwan's #1 online shopping portal looks like [1]

[1] https://shopping.pchome.com.tw/

"Brain drain" to China and the US compounds some of these challenges. Very low salaries may be in part to blame here -- an engineer in Taiwan may make an equivalent of about $40k USD/year, while a home still costs as much as it does in Palo Alto.

EliRivers• 8 years ago

That just looks like a different aesthetic. Much like Korea and Japan[1]; they could make minimalist webpages in the Western style, but they choose not to.

[1] https://randomwire.com/why-japanese-web-design-is-so-differe... and https://www.translatemedia.com/translation-blog/website-desi... and http://digitalcommunications.wp.st-andrews.ac.uk/2016/03/03/... and so on

weiming2• 8 years ago

It's not the high information density on the home page (common in Asia) but the overall web design style and functionality. The site was developed over a decade ago and has many interesting bits. For example, the "show me the product I ordered" page brings you to a captured JPG screenshot of the product listing.

And product listing pages look something like this:

https://24h.pchome.com.tw/prod/DSAM2L-A9007SS3R

Contrast/compare with these main players in China:

http://www.jd.com/

http://tmall.com/

http://taobao.com/

ryanlol• 8 years ago

Is this just a different aesthetic too http://live.pchome.com.tw/liver_form_predb.php?live_no=L1711...

JoshMnem2• 8 years ago

This is what Taiwan's #1 online shopping portal looks like

I'm guessing that this opinion won't be popular here, but that is much better looking than things like Material Design. Except for the animated GIFs, I would prefer that shopping portal style without hesitation.

tanilama2• 8 years ago

Your preference doesn't mean it is not outdated.

klodolph• 8 years ago

Is China catching up? Last time I checked, TSMC was still a few nodes ahead of any Chinese fab.

worldsurfblue3• 8 years ago

US, South Korea, Taiwan, Japan, and Europe really needs to form a coalition that would put pressure on Chinese government-sponsored companies blatant hacking attacks/stealing technologies, either by taking steps to reduce Chinese government investments in crucial technologies, punish Chinese firms like Huawei via sanctions, or put massive tariffs on China like US is doing. China is a very bad actor in the world.

Some readings: How Chinese hacking felled telecommunication giant Nortel https://www.afr.com/technology/web/security/how-chinese-hack.... China-based hackers burrow inside satellite, defense, and telecoms firms https://arstechnica.com/information-technology/2018/06/china...

amsilprotag• 8 years ago

If podcasts are more your speed, I'd recommend Bloomberg's Odd Lots with Dan Wang, which talks about China's 2025 plan.

https://www.bloomberg.com/news/articles/2018-05-21/this-is-c...

Jerry2• 8 years ago

We should start banning importation of products containing stolen technologies. And companies that use stolen technologies and their CEOs should be banned from Western markets.

foobarbazetc2• 8 years ago

Then Apple products are banned in China tomorrow and Apple loses half its value.

Let’s see how that goes. ;)

tooltalk2• 8 years ago

That's how the current patent/trade system works. If it turns out there are products made without proper IP licensing, the USITC can ban importation of infringing goods.

foobarbazetc2• 8 years ago

Nobody actually cares about any of this. And no country is going to form any sort of coalition with the US right now.

It’s just shifting power centers and really all comes down to corporate profits.

whatyoucantsay• 8 years ago

Nobody actually cares about any of this... It’s just shifting power centers and really all comes down to corporate profits.

Europe has made this mistake before. Appeasing a totalitarian, expansionist dictator works well, abruptly to the point at which it doesn't.

To be clear, this is an attack on the sovereignty of a fully democratic nation with a population the size of Australia's.

Some things are more precious than "corporate profits".

stcredzero3• 8 years ago

The US used to run rampant over other's intellectual property in the 1800's. As far as I know, that didn't involve much industrial espionage. China is exploiting its sovereignty to enable industrial espionage over computer networks without consequences. The strategic solution is to raise the cost of this activity. Maybe one of the best things Microsoft could do, would be to implement a suite of future products providing 1) iron clad application sandboxing 2) all executable content requiring digital signature. Follow this up with aggressive use of honeypots and poison pills.

worldsurfblue3• 8 years ago

The US used to run rampant over other's intellectual property in the 1800's

That's a common myth. One person, samuel slater, memorized the designs of textile factory machinery as an apprentice to a pioneer in the British industry before migrating to the United States at the age of 21. https://en.wikipedia.org/wiki/Samuel_Slater US didn't steal anything using Samuel Slater.

I haven't heard of any other examples of US stealing intellectual properties in 1800. Plus, that's over 200 years ago. Would you like to bring up the something more recent?

freeone30002• 8 years ago

Windows S sounds like this initiative. (People don't like who has to provide the signature)

njoro2• 8 years ago

There is no stopping China in the information age. Someone said "information wants to be free". That was 35 years ago. China will catch up to the west whether it is by stealing, acquiring or of their own accord. As long as the west think it is a better idea to focus on real estate, finance and service jobs we won't even keep up. South Korea, Taiwan and Japan almost completely missed the Internet. And frankly so did most of Europe and the US. European manufacturers have been moving their factories, if not to China, to Eastern Europe for years. While Midea, a large Chinese appliance manufacturer, just bought Kuka last year. They are now apparently adapting all their products to be made by robots. It is just completely different trajectories.

worldsurfblue3• 8 years ago

There is no stopping China in the information age.

Says who?

Someone said "information wants to be free". That was 35 years ago.

China's great firewall will disagree with that statement

China will catch up to the west whether it is by stealing, acquiring or of their own accord

Not if you safeguard your secrets, plus their own crashing economy will stop the catching up part

ISL• 8 years ago

It's not about stopping China. It is, or at least should be, about establishing norms with which we can all work together globally.

NicoJuicy• 8 years ago

I can see any of them form a coalition as long as it doesn't involve the US ( because of Trump), could be better in 2 years though, when trust comes back.

PS. For the ones downvoting, at least say why and where you live.

PS2. Belgium (EU) and work for a Canadian company

est• 8 years ago

There are tons of other country that had the chance to "steal" technology, it's only China that really puts hard work and effort to manufacture it to a product, and drop into market.

cm2012• 8 years ago

That's a big part of what the TPP was.

powerapple2• 8 years ago

I think China has proven that for developing world to really develop, they should employ the same tactic. The real monopoly of developed world is in technology, and there is no way any poor country can catch up. Poor countries will always just be some 'market' unless they do something to save themselves. And when robot technology really takes off, poor country will have 'zero' chance of getting out of their situation again, they are going to be in deep trouble.

YorkshireSeason7• 8 years ago

[1] is an interesting recent article, sketching the mainland's multi-pronged strategy for taking over Taiwan.

[1] https://sentinel.tw/china-threatens-essence-taiwans-statehoo...

yborg• 8 years ago

I've always felt that the obsession that the Chinese government has with Taiwan has a lot to do with the CCP still being butthurt over the escape of the Nationalists after the Chinese Civil War. They essentially never achieved complete victory over the Kuomintang. I wonder if the CCP were no longer governing China whether there would be such a focus on re-annexing Taiwan.

elefanten• 8 years ago

That's a big part of it. Another big, enduring part is that Taiwan is living proof that Chinese culture and democracy mix perfectly well (something the CCP tries to deny) and a living body of culturally Chinese people who have experience with democratic governance. In other words, it's a big looming legitimacy boulder sitting above the CCP's head -- they fear every day that it will break off and fall.

mac01021• 8 years ago

Really? are any of those CCP members still active, or even alive?

YorkshireSeason7• 8 years ago

Bizzarely, even today, Taiwan's interpretation of the "One China" consensus is that Taiwan, is the legitimate ruler of all of China, including the mainland.

I'm not sure why, maybe the Taiwan sees this as a bargaining chip, to be given up at an opportune moment, in exchange for something else, e.g. the Mainland accepting Taiwan's independence. I suspect this would have been possible at some point when the PRC was weak (maybe in the 1960s or 1970s) but seems unlikely now. I read somewhere that this might be because a formal acceptance of no longer being rulers of all of China, might trigger the Mainland's anti-secession laws, which in turn would lead to an invasion on Taiwan by the Mainland.

amenod• 8 years ago

Behind paywall: https://archive.is/uLiop

coliveira• 8 years ago

It needs to be reminded that, from China's perspective, Taiwan is their territory. Anything that is invested in Taiwan may (or will) eventually end up in Chinese hands. As China grows, they will require deals with Taiwanese companies that are similar to mainland deals.

tanilama2• 8 years ago

Realistically, Taiwan can't stop it. The language barrier is zero, and the number of Taiwanese living in China is just off-the-charts.

The truth they might have to ultimately face, is that China is too close to them and way bigger. There might be a way to keep balance in between within their means, but to think they can ignore/prevent Chinese influence is just fantasy.

known• 8 years ago

By acquiring ML/AI/Robotics IP China can export Ultra Low Cost/Superior Products.

powerapple2• 8 years ago

So now Chinese company cannot approach employees in Taiwanese companies any more. Okay.

Taiwan’s Technology Secrets Come Under Assault from China

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