Hundreds have found greener pastures in Taiwan’s fast-growing auto electronics sector, where smart mobility is eclipsing smartphones as the next tech frontier.

When Paul Wu left Hsinchu-based fabless semiconductor company MediaTek in 2011, he was eager to found his own company providing cloud software management for smartphone makers. But that enthusiasm soon dimmed as major U.S. cloud providers moved aggressively to control the over-the-air (OTA) update market. Abandoning the smartphone business, he began searching for an industry still beyond the reach of giants.

Wu’s search culminated in 2017 with the launch of Carota, which develops and sells over-the-air software solutions for automakers. Today, millions of vehicles across Asia run on Carota’s system.

In addition to OTA updates, the company offers remote diagnostics that help optimize performance and cut down on trips to repair shops. Beyond that, it provides software for monetization of in-car subscription services, supplier management for car mass production, and video solutions for the transportation management of car fleets. 

Carota is believed to be the only company in Taiwan with critical international certification for OTA technology. This gives it a notable advantage in a field where updating software in modern cars is far more complex and safety-sensitive than in Internet-of-Things devices, which typically have far fewer electronic control units.

“In 2017, I did the international roadshows to visit car OEMs [original equipment manufacturers] to pitch my OTA,” Wu says. “I was frustrated, as they were consumed by the ambition to follow in Tesla’s footsteps in developing everything in-house. But then I got opportunities to build up reference cases for a solid track record in Asia, leading to service hubs in 13 countries and customers across over 20 nations.”

Wu’s success story aligns with the findings of the Automotive Research & Testing Center (ARTC Taiwan), a government-funded nonprofit auto research facility located in Changhua County. ARTC estimates that Taiwan now has about 500 automotive electronics companies, spanning everything from chip design to modules, components and system integration. The sector’s output was valued at roughly NT$16.5 billion (approximately US$500 million) in 2024, and is projected to surpass NT$30 billion by 2028.

“Taiwan’s automotive electronics industry is developing rapidly, and an increase in the number of companies entering the automotive electronics sector is anticipated,” says Jerry Wang, chairman of ARTC Taiwan. “The main driving forces behind this growth primarily stem from the rapid expansion of vehicle intelligence, connectivity, and electrification, while the demand for ADAS (Advanced Driver-Assistance Systems) is surging.”

Wang notes estimations that by 2030, electronic systems will account for nearly 50% of the price of a new car, further propelling the growth of the in-vehicle technology production value.

Taiwan boasts one of the world’s most complete semiconductor industry ecosystems, covering the entire chain from IC design to wafer manufacturing, packaging, and testing. Leading players such as TSMC, MediaTek, Novatek, and Realtek hold strong positions in high-performance AI chips, system-on-a-chip devices, automotive Ethernet chips, and audio codecs — the hardware and software that compress and decompress digital sound. This deep bench of expertise supports the development of advanced automotive electronics and gives Taiwan a competitive edge in meeting the growing demand for smarter, more connected vehicles.

Taiwan also possesses deep technical and manufacturing capabilities in areas such as battery management systems, motor control, charging piles, electric vehicle power components, and transmission components.

Wang points out that another strong selling point for Taiwan is its geographically concentrated industry chain. “Close collaboration among IC design, manufacturing, packaging, materials, and equipment suppliers significantly reduces development, manufacturing, and logistics lead times,” he says.

Kei Hasegawa, partner and office manager for Hong Kong & Taiwan at YCP Group, a management consulting firm, notes another advantage. Taiwanese makers of upstream semiconductors, midstream display panels, and in-vehicle monitoring systems are increasingly well-positioned to capture growth in the smart cockpit market, driven by rising demand for AI integration, system-level innovation, and interactive display technologies.

“For example, MediaTek, one of the world’s largest fabless semiconductor companies and a leader in mobile and connectivity solutions, has partnered with Nvidia to introduce the 3 nm Dimensity Auto platform, which supports on-device chatbot functions, multi-screen displays, and driver monitoring,” says Hasegawa.

He adds that AUO, Taiwan’s largest panel maker and a major supplier to brands including Tesla and BMW, is advancing Micro LED technology for head-up displays and transparent smart windows, targeting mass production between 2026 and 2027. The company has also expanded its system integration business through the acquisition of BHTC, a German Tier-1 supplier specializing in human-machine interfaces and climate control systems.

Going deeper into the specifics, the Market Intelligence & Consulting Institute (MIC) in Taipei points out that Taiwan’s auto electronics industry is characterized by its high level of modular integration, agile manufacturing capabilities, and well-established supply chain coordination. Key product strengths include in-vehicle display modules and telematics control units, which are embedded systems in a vehicle that act as a central hub for communication between the car and external networks.

“As the automotive industry shifts toward smarter and more connected vehicles, this transition has opened new opportunities for Taiwan’s traditional ICT companies,” says Abby Tsai, an industry analyst at MIC. “Global Tier-1 suppliers and automakers are leveraging the capabilities of Taiwanese firms to accelerate their digital transformation.”

Shielded against headwinds

MIC’s Tsai explains that a prolonged period of doldrums recorded in the vehicle-related category of Taiwan’s official industrial production index (IPI) has little to do with auto electronics. The IPI showed that local vehicle-related output contracted throughout 2024 and this year.

According to registration data compiled by Taiwan’s Ministry of Transportation, in the first quarter of 2025, Taiwan’s domestic vehicle market declined by 11% compared to the same period last year, with total sales reaching 99,860 units. Sales of domestically produced vehicles decreased substantially, while imported vehicle sales also saw a decline. Indeed, in April, the strongest drag on Taiwanese private consumption was exerted by a drop in vehicle sales, according to the Economist Intelligence Unit, a private think tank.

Yulon Motor, a major local auto maker, attributed the downturn to buyer unease over lingering tariff concerns. Another factor cited was buyers expecting U.S.-Taiwan tariff negotiations to force the Taiwan government to ultimately lower import tariffs for cars.

“Exports of advanced automotive electronic modules from Taiwan continue to grow, though this growth is not fully captured by the traditional statistical classifications,” says MIC’s Tsai. “While traditional automotive manufacturing may be facing headwinds, Taiwan’s automotive electronics sector remains resilient and continues to expand, especially in high-value-added modules for smart and connected vehicles.”

As for the outlook, Carota’s Wu is optimistic about maintaining the current pace of around 50% annual revenue growth. The company’s engineering teams are primarily located in Taiwan and South Korea, with some supporting staff in China.

This year, Wu’s goal is to grow the engineering team in Japan and Europe. In terms of technology, Carota’s main mission is to incorporate the concept of software-defined everything in its strategic thinking.

“We aim to leverage the AI technology and data analytics of Usage-Based Insurance (UBI) to help fleet management operators and automakers to reduce insurance costs and realize benefits of performance improvement,” says Wu.

UBI, also known as pay as you drive, pay how you drive, or mile-based auto insurance, is considered a type of vehicle insurance whereby the costs depend on the type of vehicle used, measured against time, distance, driver behavior, and place. This differs from traditional insurance, which attempts to differentiate and reward “safe” drivers, giving them lower premiums and/or a no-claims bonus.

ARTC’s Wang is optimistic about Taiwan’s standing in the global auto electronics supply chain. He says that while most Taiwanese auto electronics companies are Tier-2 or Tier-3 suppliers, some, such as Pegatron, Delta Electronics, and Quanta Computer, have already moved up to Tier-1 status.

Leading the charge is Hon Hai Technology Group (Foxconn), which, through its subsidiary Foxtron, has expanded beyond components into full-scale electric vehicle manufacturing. Beyond Luxgen, it will produce EVs for Mitsubishi, with launches in Australia and New Zealand planned for the second half of 2026.

“Moreover, to address the uncertainties brought about by geopolitics, European and American auto makers are diversifying their supply chains and reducing their reliance on mainland China, which will provide Taiwan’s next wave of growth opportunities,” says Wang.

Some Taiwanese auto electronics solution providers are already moving on to greener pastures. For example, Hsinchu-based oToBrite Electronics initially focused on the development and application of automotive Vision AI technologies but has, in recent years, shifted its focus toward commercial vehicles, outdoor uncrewed vehicles, and autonomous mobile robots (AMRs). This was due to the global passenger car market becoming increasingly competitive and price-sensitive amid the rise of Chinese EV brands.

“oToBrite aims to strengthen partnerships with global ecosystem players, especially Taiwan-based Nvidia industrial computer manufacturers, to enhance international visibility and market penetration,” says oToBrite Associate Vice President Ian Tzeng.

Tzeng adds that the company is working with nearly 10 Taiwanese partners in Nvidia’s ecosystem to co-develop and market GMSL (Gigabit Multimedia Serial Link) automotive-grade camera modules — high-speed data links designed for transmitting video and sensor data between a vehicle’s cameras and processing units — aiming to tap the fast-growing market for outdoor autonomous mobile robots and driverless vehicles.

In addition to its camera module collaborations, oToBrite’s Level 2+ Vision-AI-based ADAS for heavy commercial vehicles integrates eight automotive cameras with a single ADAS domain controller, reducing installation complexity. Comparable systems by rivals require up to six separate systems and multiple vendors to meet ADAS compliance.

The company’s other newest product is a multi-camera visual simultaneous localization and mapping (vSLAM) solution, a technology that uses video from multiple cameras to create real-time maps and determine precise vehicle position. This system achieves localization accuracy down to one centimeter, offering a more cost-effective and deployment-friendly alternative to expensive technologies like LiDAR, which requires costly sensors, specialist operators, and substantial data processing infrastructure.

The system is ideal for uncrewed vehicles and AMRs used in sectors such as agriculture, logistics, mining, and port operations, offering particular appeal in markets like Taiwan, where aging populations and labor shortages are intensifying.