Electronics players eye "autotronics" in bid to diversify product portfolios

This article was written by Graham Norris and published by the Taiwan Journal on October 28, 2005. It reports that electronics systems are playing an increasingly important role in the production of automobiles.

The article quotes the market research firm IC Insights, which has found that electronics systems constituted only 2 percent of the price of an average car in 1974. However, the figure has increased to about 20 percent in 2003. It is predicted that the figure would continue to rise, to about 35 or even 40 percent in 2010.

Other market analysts agree that the annual growth rate of the automotive electronics sector will be more fascinating over the next several years. A recent study predicted that the growth rate would reach 7.5 percent in 2009, with a global market worth US$124 billion. Another study predicted that the figure would be even higher, at about 8.3 percent over the period 2002-2008.

All this market analysis has prompted Taiwan's electronics manufacturers to diversify their product portfolios. This is despite the fact that Taiwan's electronics components industry is still performing well, particularly in the fields of semiconductors and flat-panel monitors.

At the recent Taipei International Electronics Show, or Taitronics, held from October 12 to 14, government officials and industry representatives agreed that Taiwan's electronics manufacturers need to retain their competitiveness and to locate more niche markets in order to create more added value. The government also plans to spend US$300 million over the next five years to assist local companies develop and manufacture automotive electronics products.

Most significantly, in spring 2006, Taiwan's automotive electronics industry will get its own separate show in Taipei, which will be called "Autotronics". Further information will be announced when it becomes available.

The article provides a detailed analysis on various factors that have contributed to the fast growth of the automotive electronics industry in recent years. It lists onboard navigation systems as a good example of how the combination of technological advancements and consideration of consumer convenience is driving the automotive electronics industry. Finally, the article discusses several challenges faced by manufacturers of automotive electronics as they seek to gain a bigger share in the global market.