A bi-weekly snapshot of Taiwan business news stories brought to you by CommonWealth and AmCham Taiwan’s TOPICS
Pegatron enters Tesla supply chain
Apple supplier Pegatron has recently expanded its cooperation with U.S. car producer Tesla. According to news sources, Pegatron has recently entered Tesla’s charging station supply chain and is expected to move into mass production by Q3 2021.
In recent years, Pegatron has been proactively fulfilling electric car-related manufacturing orders. Starting last September, Pegatron has taken orders for Tesla’s Model 3 15-inch central control systems and chassis control equipment. It is estimated that Tesla could experience 60% growth in production capacity in 2021, likely benefiting Pegatron as well.
Tesla produced nearly 500,000 vehicles in 2020, a 36% increase from the previous year. Although official projected production figures for 2021 have yet to be released, Tesla CEO Elon Musk predicts that it could reach 840,000 to 1 million units.
Big bonuses and pay hikes reflect good performance and optimism for coming year
Amid the pandemic, Taiwan’s economy has outperformed the rest of the world. The Taiwanese stock market soared in the second half of last year and recently broke its previous record of 16,000 points. With the Lunar New Year soon approaching, the recent good news for high-tech stocks is reflected in the large year-end bonuses provided by Taiwanese companies to their employees. It is expected that the tech sector will continue to spur economic growth this year.
Taiwan Semiconductor Manufacturing Co.’s performance over the past year has caught the eye of many. Thanks to an influx of foreign investors, the company’s stock value has risen to NT$600 per share, catapulting its market value above the NT$600 billion benchmark. TSMC has surpassed both Berkshire Hathaway and Alibaba to become the ninth largest company worldwide, just behind Tencent. According to information shared by TSMC engineers, their end-of-year bonuses were equivalent to 41 months of salary.
MediaTek’s stock rally has put its market value in the trillions of NTD, and the company has enjoyed revenue gains of over US$10 billion. On January 14, MediaTek announced that on top of its year-end bonuses, all full-time employees at the company and its subsidiaries are to receive an additional NT$100,000, for a total of up to NT$1.7 billion per employee.
Semiconductor testing and packaging giant ASE Group has also announced an increase in bonuses for its employees. Factory workers in Kaohsiung are to receive NT$10,000 each, totaling NT$100 million. The company announced that beginning in 2021, it would raise employee salaries by 3-5% in order to bolster talent retention.
The Formosa Plastics Group also enjoyed a decent performance. Its subsidiaries Formosa Plastics, Nan Ya Plastics, Formosa Chemicals & Fiber, and Formosa Petrochemical revealed in January each employee received as their 2020 year-end bonus the equivalent of 3.66 months of salary.
Cisco to open new software center in Linkou
U.S. tech giant Cisco’s Managing Director for Greater China and Taiwan George Chen announced on January 13 that the company is set to open its first software center in the Asia-Pacific in Linkou after the Lunar New Year holiday.
The new facility will be used to develop Cisco’s DevNet software development platform, with the aim of making the company’s software architecture and application programming interface (API) available for commercial use. In addition, the company will partner with other software enterprises to develop information security capabilities and cultivate software talent.
This development is part of the Ministry of Economic Affairs’ Pioneers for Innovation Leadership on Technology Program (PILOT). Under this scheme, the MOEA will invest over NT$10 billion in financial aid within a seven-year period, with the goal of attracting foreign high-tech companies to establish R&D centers in Taiwan.
According to the MOEA, the PILOT program will subsidize up to 50% of foreign investors’ R&D capital. The MOEA estimates that there will be one major investment every year, creating NT$40 billion in annual investments during the seven-year program and adding at least 600 new R&D talents.
This edition was translated from the original Chinese by Jason Wu.