Martian2
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Today, Reuters reported Taiwan's October 2017 export orders rose 9.2% year-over-year.
Reference: Taiwan Oct export orders rise 9.2 pct y/y, above f'cast | Reuters
In this post, I want to provide an explanation for Taiwan's long-term ability to outgrow the worldwide average.
In my view, part of Taiwan's economic success is attributed to technological innovation. Taiwan occupies niches in technology that later develop into a mainstream product.
A good example is Taiwan's Largan. Founded in 1987 and having gone public in 2002, Largan has a niche in manufacturing aspherical camera lenses made of plastic. Everyone else manufactures glass camera lenses, because of better clarity. Yet, Largan pursued plastic camera lenses due to its impact resistance. Interestingly, after decades of improvement, Largan's plastic lenses matched glass camera lenses in clarity. Largan became very successful after the invention of smartphones, which uses small plastic lenses.
Largan has annual sales of US$1.5 billion and a profit of US$750 million.
Citation for Largan sales: Global 2000: Growth Champions 2017 RANKING #201 LARGAN Precision | Forbes
Citation for Largan profit: Taiwan's tight-lipped and hugely profitable Largan Precision | Nikkei Asian Review
The underlying mechanism behind Largan's success is still at work. Taiwan's Ledtech is a supplier to the niche market of low-temperature LED lighting. Ledtech has a growing business.
"Ledtech is currently a major supplier of low-temperature LED lighting devices to a number of refrigerated and freezing cabinet makers in North America, including IR, Hussmann and Criotec. Ledtech also ships such products used in beverage vending machines and small beverage refrigerators and freezers.
Ledtech has recently landed orders for low-temperature LED lighting devices from a number of refrigerated and freezing cabinet suppliers globally, which all belong to the same supplier chain for vending machines to a brand beverage vendor, according to industry sources.
Ledtech is expected to begin shipping related lighting products to new clients in March 2018 at the earliest, and the proportion for the new product line is likely exceed 30% of Ledtech's total revenues in 2018, the sources estimated." (see citation below)
In conclusion, Taiwan has all of these interesting companies that occupy technology niches. As markets develop, some of these niches become mainstream technologies. Thus, Taiwan's export orders continue to grow over the long-term and the island has prospered for decades.
Ledtech inaugurates new LED lighting factory in China | DigiTimes
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King Of The iPhone Supply Chain: Asia's Largan Precision Has Profit Margins Double Apple's | Seeking Alpha
Reference: Taiwan Oct export orders rise 9.2 pct y/y, above f'cast | Reuters
In this post, I want to provide an explanation for Taiwan's long-term ability to outgrow the worldwide average.
In my view, part of Taiwan's economic success is attributed to technological innovation. Taiwan occupies niches in technology that later develop into a mainstream product.
A good example is Taiwan's Largan. Founded in 1987 and having gone public in 2002, Largan has a niche in manufacturing aspherical camera lenses made of plastic. Everyone else manufactures glass camera lenses, because of better clarity. Yet, Largan pursued plastic camera lenses due to its impact resistance. Interestingly, after decades of improvement, Largan's plastic lenses matched glass camera lenses in clarity. Largan became very successful after the invention of smartphones, which uses small plastic lenses.
Largan has annual sales of US$1.5 billion and a profit of US$750 million.
Citation for Largan sales: Global 2000: Growth Champions 2017 RANKING #201 LARGAN Precision | Forbes
Citation for Largan profit: Taiwan's tight-lipped and hugely profitable Largan Precision | Nikkei Asian Review
The underlying mechanism behind Largan's success is still at work. Taiwan's Ledtech is a supplier to the niche market of low-temperature LED lighting. Ledtech has a growing business.
"Ledtech is currently a major supplier of low-temperature LED lighting devices to a number of refrigerated and freezing cabinet makers in North America, including IR, Hussmann and Criotec. Ledtech also ships such products used in beverage vending machines and small beverage refrigerators and freezers.
Ledtech has recently landed orders for low-temperature LED lighting devices from a number of refrigerated and freezing cabinet suppliers globally, which all belong to the same supplier chain for vending machines to a brand beverage vendor, according to industry sources.
Ledtech is expected to begin shipping related lighting products to new clients in March 2018 at the earliest, and the proportion for the new product line is likely exceed 30% of Ledtech's total revenues in 2018, the sources estimated." (see citation below)
In conclusion, Taiwan has all of these interesting companies that occupy technology niches. As markets develop, some of these niches become mainstream technologies. Thus, Taiwan's export orders continue to grow over the long-term and the island has prospered for decades.
Ledtech inaugurates new LED lighting factory in China | DigiTimes
----------
King Of The iPhone Supply Chain: Asia's Largan Precision Has Profit Margins Double Apple's | Seeking Alpha
