Taiwan Tech Firms Navigate New Realities With Agility

Innovative deployment of consumer products was the focus for Taiwanese companies participating in the 2022 IFA electronics show in Berlin.

Taiwan’s consumer electronics providers are doubling down on new market segments as the boom driven by a shift to remote working subsides in favor of belt-tightening amid high inflation.

The 2022 edition of IFA, one of the world’s largest consumer electronics exhibitions held this September in Berlin, provided a glimpse into the development of some of these companies. Acerpure, a subsidiary of Acer, best known for its consumer notebooks and tablets, unveiled the Acerpure cool AC551-50W, a two-in-one air circulator and purifier that in Europe comes with a hefty retail price tag of about €400, or around NT$12,550.

Acerpure’s air solution devices have since 2020 been installed in over 2,500 classrooms across Taiwan under a deal with the Ministry of Education to enhance air quality and mitigate COVID-19. The devices have also been available in France, Switzerland, and Hungary since August this year. Germany is next in line for the company’s market expansion, which is what prompted Acerpure’s participation in IFA.

Tailoring its sales pitch to address consumers’ concerns about future electricity bills, Acerpure emphasizes that the devices are fitted with DC motors that on average consume 70% less energy than their AC counterparts.

“Although there is strong competition in the market, we do not have any direct competitors, given that only our devices combine circulator and purifier, the resulting strength being that the purified air is spread evenly in a room,” said Leonard Yang, an Acerpure sales manager, at the sidelines of IFA.

“Air pollution is much worse in the Asian markets we are entering – such as India, Thailand, the Philippines, and Taiwan – than in Europe, but European demand for purifiers is still strong in the post-pandemic period,” he adds.

Yang explains that the Acerpure pro-UVC Air Purifier, the company’s newest flagship model, comes with a detector that measures CO2 concentration in the air. This feature especially caters to consumers in the northern hemisphere, who are increasingly worried about heating systems’ negative effects on indoor air quality. If the CO2 value is too high, both a pop-up notification on the app and a lightning effect on the purifier will alert the user.

Taiwan excellence was on display at IFA in Berlin, which attracted over 160,000 visitors.

While Yang acknowledges that high inflation is clouding sales prospects, he believes that Acerpure is shielded against exchange rate fluctuations and rising input costs through its parent company Acer’s hedging strategy.

ible Technology, an Internet-of-Things (IoT) and wearable device company based in Taipei, also wagers on consumers’ desire to breathe fresh air. ible used IFA as an opportunity to launch the Airvida E1, which it labels “the world’s first air purifier with built-in earphones.” The device resembles a U-shaped necklace with carbon brushes on both ends. ible says that by generating negative ions along the breathing path, it eliminates harmful substances such as viruses, bacteria, PM2.5 particles, as well as allergens around the face, mouth, and nose – even when there is a breeze.

Disbelievers should note that Airvida won the 2022 German Innovation Award and that Academia Sinica’s Infectious Disease Core Facility in 2021 certified the device for its coronavirus removal capacity. According to Academia Sinica’s test report, as cited on ible’s website, “Airvida can inactivate 99.7% of the coronavirus in a very short time.”

ible says it has sold about 300,000 of its devices globally, mostly in Japan, Southeast Asia, and Taiwan. The current sales price of ible air purifiers averages about US$190 (around NT$5,900), with Amazon and inflight duty-free shopping serving as the primary sales channels.

“We manufacture in Taiwan and Japan, with Japan constituting the main market owing to the high prevalence of allergies there,” says Elaine Lin, a senior manager of ible. “Our Airvida E1 can purify the surrounding air while the user enjoys music thanks to the noise-canceling earphones, and our app can also provide instant PM2.5 and pollen information according to the user’s location. It then reminds users to turn on the air purifying function or adjust the level of the negative ions when needed.”

IFA also offered a closer look at Taiwan textile titan Makalot Industries’ efforts to expand its foothold in smart wearables. Makalot’s WIIM Pro series of smart Electrical Muscle Stimulation (EMS) pants and shorts are said to enhance workout results. The application of EMS technology has been prevalent in the sports industry for some time, but it has been a challenge to thoroughly integrate the technology into fabrics and apparel while ensuring comfort, style, and durability.

“Whereas other EMS clothing is made baggy by the cables, we have developed conductive yarns that are stretchable and easily withstand over 50 washing cycles, the latter being a major advantage given that these clothes’ retail sales prices are still high at up to €200 per piece,” says Evan Sheu, a Makalot manager at IFA’s sidelines. “Another major issue we have tackled is that we have modified our knitting machines to handle conductive yarns because otherwise, the yarns’ metal content would drastically reduce the durability of the traditional knitting machines.”

Sheu predicts that Makalot’s smart wearables will find receptive new markets in the flourishing gaming industry, as conductive yarns can be used for motion capture. Users of this technology will be able to create their own avatars much quicker and more accurately than they could before by using cameras. At IFA, Makalot presented clothing for motion capture that will come with retail price tags of up to €600, making durability essential.

Standing among other innovative Taiwanese companies exhibiting at IFA was Miaoli-based WiseChip, a maker of mini-sized and transparent OLED displays that can be integrated into cycling or swimming goggles. Meanwhile, New Taipei City-based Maktar promoted a device that combines smartphone chargers and automatic backups. While WiseChip sees its capability to produce OLED displays as small as 0.19 inches at a minor production error rate as its competitive advantage, Maktar is the first company with the self-evidently good idea of pre-empting smartphone data loss by automatically creating backups during charging.

Nevertheless, WiseChip’s Senior Vice President York Tsai acknowledges that the low exchange of the Japanese yen has been a recent headache for the company, since Japan constitutes one of WiseChip’s main markets.

Industry observers see the overall outlook for Taiwanese consumer electronics companies in 2023 as pretty bleak, given their expectations of continued economic stress in China, the withdrawal of stimulus in Western markets, and stagnation and recession in the U.S. and the EU, respectively.

 July saw a weakened demand for semiconductors and Taiwanese export orders slumping into a year-on-year contraction. International Data Corp. (IDC), a global provider of market intelligence, predicted in late August that this year’s global smartphone shipments would fall by 6.5% to US$1.27 billion, while prices would rise by 6.3%. The main reason is that inflation and geopolitics have greatly suppressed consumer demand.

“Worsening economic uncertainty and still-elevated global inflation will keep pressure on households and businesses in most major markets, suggesting a pretty dire export outlook for finished consumer electronics,” says Nick Marro, lead for global trade of the Economist Intelligence Unit.

“We are still expecting the global chip shortage to persist into next year, which will preserve some demand for Taiwanese chips, but it will be uneven,” he adds. “We are still seeing warnings around slowing demand and excess inventory, and so these dynamics might ultimately provide only limited support to the Taiwanese export sector.”