Fast-Growing EV Market Buoys Taiwan's Electronic Component Makers

With Apple Car entering the electric vehicle market and bolstering the overall attention and investments in this fast-growing, lucrative industry, Taiwanese electronic parts suppliers that have played the long-term strategy in the past four to five years are finally seeing results.

In the past decade, the IT industry has plateaued, leading NB and PC-related connectivity parts to seek out greener pastures as this significant market became more reliant on the so-called "red supply chain." These firms eventually transitioned into the automotive electronic parts industry; however, they have limited space to grow in the traditional auto market due to demand and product development until EV came along. Under the advent of 5G implementation, spurring on IoT technologies, these precision electronic parts makers found the perfect stage in machinery electronics and telecommunication applications.

Companies pointed out that automotive products have longer produce lifespans and are less likely to become obsolescent than consumer electronics. Automotive products also require much stricter and stringent regulations in terms of quality; firms say it's unlikely to acquire certification without three to five years of R&D, indicating that those companies seeing increased attention in recent years had years of preparation beforehand.

What can be said for certain is that with the auto industry entering the next phase of electronic vehicles, it would be a boon for the Taiwanese electronics industry, especially with industry players like Tesla and NIO's proactive approach to designing and innovation.

According to market survey data, global EV sales will reach 3.55 million units by 2021, a significant 69% increase compared to 2020. In the long-term, experts expect to see sales hit 22 million vehicles by 2030, a 10-fold growth compared to the present state of the market.

Aside from BizLink, which was among the first Taiwanese firms to enter Tesla's production chain, other notable Taiwan's connectivity component suppliers include SINBON, Chant Sincere, ACES, Hotron, and AllTop Technology.

As a leading supplier, Tesla's cable assembly and management supplier BizLink reportedly could obtain two startup EV-branded clients, further cementing its role in the luxury EV and pickup markets. Reports indicate the firm will begin seeing profits roll in in the first half of 2021

SINBON's EV products include charging guns, EV charging stations, and sockets. For its self-driving vehicle business, the firm focuses on designing connective cable sets for LiDAR modules, which prioritize insulation resistance, waterproof capabilities, and high-speed transmission. SINBON has also successfully found a business in the electric bicycle area by providing connectors, cable management, control units, and complete electric bicycle product assembly services.

Chant Sincere has been cultivating its auto market strategy for many years; originally focusing on multimedia entertainment, the company expanded its services to include automotive IoT applications like Ethernet connection, ADAS-related connectivity cables, and Type C. Chant Sincere found areas to prioritize, such as auto-use cameras, surround-view cameras, radar, and LiDAR, and security systems that prevent fatigue driving situations. The company has now become a Tier 1 supplier, with clients like Tesla, Mercedes Benz, BMW, and Volkswagen. Chant Sincere expects to see profits grow 90% this year in terms of its auto-related businesses.

Hotron is another example that has gone into auto-use cable and multimedia entertainment network connectivity. In the future, the company has its eyes on EV charging cables and power cables. The firm expects to see increased production and delivery of EV charging cables along with the opening of its Vietnam factory in Q2, supplying American EV brands.

ACES' auto connectivity components and cables saw a decline in 2020 due to the pandemic. However, its newly developed ADAS, parking sensor connectors, and EV charging and cable connectors expect to see increased demand from European clients in 2021.