Taipei - It’s not often you meet a government minister with genuine motivation to address the needs of the office he or she is in. I’ve met many over the years, and they often say all the right buzzwords for the moment and for the audience, just to gain political points and win votes. In fact, I met one of the leadership candidates for the UK prime minister’s role at an event in London last evening, and not a word of his interaction with me or his speech seemed genuine. He was just after votes.

But that certainly isn’t the case with Taiwan’s Liang-Gee Chen, the minister for the office of science and technology (MOST) in the country.  EE Times sat down with him at Innovex in Taipei last week, a startup exhibition and pitching forum that ran alongside Computex. As my colleague Junko Yoshida previously wrote, he’s labeled as Taiwan’s startup minister but really knows what he’s talking about, since he also happens to be an IEEE fellow.

Chen

Chen Liang-Gee

Chen is out to make a difference for Taiwan’s innovation economy, and I had the opportunity to interview him after I had visited various startups, accelerators and a fascinating tour of the country’s Industrial Technology Research Institute (ITRI) with its huge complex in Hsinchu City. I also was a judge at the 2019 Computex d&i awards, so really got a flavor of the breadth and diversity of Taiwan’s large as well as emerging technology companies.

What struck me most during this visit to Taipei and Hsinchu is that Taiwan is putting a big effort into changing its image as simply a manufacturing hub for the electronics industry. What I saw (and maybe my program was intentionally focused this way) is many startup companies building upon the hardware heritage to provide services, and these were mainly around artificial intelligence (AI) addressing real world problems – like medtech and healthcare, as well as agriculture and manufacturing.

The tour of ITRI made me realize that although the history timeline shows the first 3 inch wafer facility installed by the TSMC as a startup many years ago at its site, the many technologies being developed by ITRI are focused on solving real world needs – such as a portable UVC LED water sterilizer system, or a fluid driven innovation which use micro-hydropower harvesting to provide LED lighting and thermal images for emergency rescue situations encountered by firefighters.

The Minister’s drive to stimulate a startup and innovation economy is backed up by substantial incentives – such as a huge financial grant of up to US$2 million to professors to commercialize their research through a spinout. He told us that he wants the professors to have big dreams, just like their silicon valley counterparts. I met two of the beneficiaries of this incentive, one using imaging AI to target healthcare, another using imaging AI to address the logistics industry. He has also brought in many international accelerators, which enable the integration of Taiwan’s startups with global market opportunities. (I will be writing about these separately).

So we asked him, what inspired him to create this program, his thoughts on what more needs to be done, the direction of travel for Taiwan’s tech industry as well as globally, and of course, some comment on the trade war and its potential impact on the supply chain.

Here’s what he told us.

EE Times: I was quite impressed with the program to fund professors to the tune of US$1-$2 million to commercialize their research. I haven’t seen this in many countries. What inspired you to develop this idea and how do you think the scheme is progressing?

Liang-Gee Chen: I am a professor, so I understand what the difficulties are for professors in Taiwan to start a company, even if the professor has very outstanding research. So as a government official I think the purpose is to help the professors overcome all the obstacles and try to fuel the building blocks of the ecosystem for technology innovation.

EE Times: That’s great, but the amount of funding you are providing is quite substantial isn’t it?

Chen: Yes, the funding shows the government’s attitude towards empowering and supporting professors. In Taiwan it’s not often a professor starts a company. In contrast, lots of engineering professors in America have the mindset and capability to start a company, but in Taiwan it’s not so common. So, we think that even if we have changed the regulations to make it easier, we need to be able to provide the right level of encouragement. That’s why we reserve budget and show professors how to have big dreams.

In Taiwan we have very outstanding research, often presented at international conferences. We want to encourage our professors to believe that value creation from their technology is not just limited to the local market, but also to worldwide markets.

EE Times: I’ve been here for a few days and I’ve seen quite a few startup programs and accelerators, like Asia Silicon Valley Development Agency, Taiwan Startup Institute, StarFab, Garage+ and others. From what I read about your intention to create this hotbed of startups you are succeeding in creating that deal flow for investors as well. Do you think this is enough? I mean a lot of startups fail, so what else needs to be done?

Chen: I think there is always room for improvement in the ecosystem, and we still have a lot to do. This includes learning from experiences of ecosystems in Israel, Silicon Valley, and also from Boston for example for biotech and the healthcare industry. Hence, we have attracted international accelerators to establish within Taiwan, so that we not just inspire the startups, but also try to help them grow through such accelerators. Ultimately, using our technology, this will also help more people in society.

EE Times: I read a report this week that there will be some 12,000 new semiconductor industry jobs created in Taiwan. Can you tell me more about that and where the focus would be?

Innovex

The Startup Terrace at Innovex in Taipei.

Chen: Semiconductors, especially this year, is a very tough year. If there’s not too much disturbance, especially from the trade war, I think that the end of last year we expected around three percent market growth. We had some discussions with TSMC and we now think the growth rate will be lower than expectations. However, we still have very positive expectations for the Taiwan semiconductor industry.

Manufacturing will still be the driving force behind the new jobs in the industry. Many companies rely on Taiwan within their supply chain, which is already well established for the semiconductor industry. We are trying to leverage this strength in manufacturing and hardware, to encourage new systems applications and fabless startups that address the needs of new applications that require a combination of both hardware and software.

EE Times: We’re heading towards a new ‘smart connected world’. What’s your vision and thoughts over the next five years, especially with the new world order where Google, Amazon, Facebook and Apple become the dominant tech players, in terms of opportunities and challenges both locally in Taiwan and globally.

Chen: [Minister laughs] That’s a tough question! The direction is very clearly towards a data driven society. Every industry and every company need to collect data, and use that data to create value, I think that’s for sure.

The advent of 5G will also create new demands and new services. For IoT, you have the sensor, collect the data, and then apply special services. For these kinds of applications, there will be tens of thousands of data driven applications. For sure there won’t be one killer application.

In autonomous cars, inside five years there will be a lot of potential here, where autonomous driving capability will increase. With different levels to help the driver and go to level 4 or level 5.

Healthcare applications is the other area, especially related to medical imaging. In medical imaging, even for the doctor it’s hard to see thousands of images and identify the potential disease. Using AI and AI imaging analysis it becomes very easy.

In some industrial applications smart manufacturing using sensors and 5G communications will be a big market for various industries.

For Taiwan I think one special segment is artificial intelligence (AI) services style companies. So, for data-driven applications, it’s not just about increased data but also in data analysis.  This is a very good segment, since Taiwan has the capability to provide all kinds of server hardware.

EE Times: Everyone still sees Taiwan as being the home of TSMC and UMC and PC manufacturing. Is this going to change that perception with new ‘unicorns’ in the AI services space?

Chen: We expect we will have some unicorns in this area. We do have a company that started less than three years ago, wiwynn, a cloud services company, which is already beyond unicorn status.

That’s why I say combining hardware capability with software services could be the strength of the Taiwanese companies. And it’s very easy for those companies to cross the unicorn lines. The ability to add value on top of the hardware is very easy.

That’s why I say we need to drive towards a ‘hardware service style’ economy: the service is based on the hardware. I think another application is AI services – some need to adopt sensors combined with edge computing, and these all relate to hardware services.

EE Times: The US-China tension right now is unfortunate.  I read somewhere there’s a real opportunity for Taiwan. I know it would be a politically sensitive topic and you have to tread carefully, so my question is, if this continues what’s the implication for the global electronics industry supply chain, wary of the fact that Taiwan is a key part of it?

Chen: I think the strength of Taiwan is that we are very good in maintaining the cost performance value of components. Taiwanese companies are a key part of the control within the ICT supply chain. By the same token, Taiwanese companies are always very sensitive to any changes in that supply chain. I think the trade war will drive the central base of the supply chain to become ‘multi distributed’. However, the power is still in some Taiwanese companies’ hands.

We are very optimistic to see the change from central control to distributed control. Even without the trade war I think there is a driving force from centralized control to distributed control. Some people say if you look at salaries in mainland China, it has growth tenfold in ten years. So, this will force companies to look at how to change the supply chain to take this into account.

EE Times: Thank you very much.