Most popular Advantech will continue to focus on I

2022-08-04
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In the next 10 years, Advantech will continue to focus on the IPC field. Advantech, the leading global industrial computer (IPC) manufacturer, has taken "innovation and opportunity" as the main growth force for many years. Due to its focus on the development of a single IPC field for many years, Advantech has naturally become one of the leading IPC manufacturers in Taiwan and even in the world. Its annual revenue is more than four times that of other Taiwan based IPC manufacturers. It is as famous as Kontron in Germany and is a world-renowned IPC manufacturer

since Advantech is a leading manufacturer, especially some views put forward by Liukezhen, chairman of Advantech, that is, the development of epolatform services, and that the IPC market still has a US $26billion output value that has not yet been developed, it will be able to establish indicators for backward IPC manufacturers in Taiwan

the so-called ePlatform service market development refers to the provision of a wide range of system integration hardware, software, customer-oriented services, global logistics support, industrial leadership and logistics e-business support architecture to help system integration partners increase the value of their solutions and services

Liukezhen, chairman of Advantech

after more than 20 years of operation, Advantech has experienced several waves of growth opportunities, does not dance with other popular industries, and adheres to the concept, innovation and customer service to create the image and achievements of Advantech. The following is an exclusive interview

Q: in the 1980s, when computers were popular, Taiwanese electronics manufacturers flocked to the commercial computer market. In the 1990s, they reached the golden age. However, in the early days of its establishment, Advantech developed towards the most unpopular IPC market. Until today, why did Advantech choose the unpopular IPC market to develop

answer: since its establishment more than 20 years ago, Advantech has always taken passion as its policy and the leader in a single field as its development goal. In the early days of its establishment, Advantech gradually became a leader in the field of Taiwan system integration plant (SI). After the company expanded and entered various product lines, more and more projects became leaders, but it always played the role of leader in the niche industry and focused on the development in the niche market

Advantech initially considered that IPC would combine into different niche products under the concept of commercial PC, and provide forward-looking services for different system integrators. At the same time, the company also considered that IPC product line could support the company's brand and backend, so it would enter this market

as for the current commercial PC field, it was not considered to enter in the past. Even after more than 10 years, it will not become a leader in this field, so it will not be considered to enter in the future

of course, at that time, commercial PCs were too mature and presented a "metoo" market, which was in sharp contrast with IPC. Because they followed the trend of popular products, they always ran after others. This kind of manufacturer is that revenue is an important task for development

on the contrary, although Advantech was in an unpopular market, because the company focused on the development of customer service at that time, it did not take revenue and volume as the primary consideration for the development of the company. Over time, profits, business opportunities and opportunities followed, which also formed that Advantech has been making money for more than 20 years

Q: since the IPC industry was only popular in Europe and the United States in the 1980s, and even European and American manufacturers, including IBM, are well-known industrial computer manufacturers, how did Advantech, as a Taiwanese electronics manufacturer, enter the IPC market occupied by European and American manufacturers

answer: in the early days of pioneer, Advantech naturally developed into the American market because the American market was the main market of IPC at that time. However, at that time, small businesses in the European and American markets were led by local relatives. Therefore, at that time, they jointly opened up the American market through their younger brother liukezhong and his friend chentianchong in the United States

at that time, the PC market was in its infancy. In addition to the commercial market, the industrial market also began to adopt PC products, especially the I/O card (isabus) used for measurement applications, driven by the system integration. At that time, the demand in the European, American and Asian markets was very strong, and it soon became the main revenue product of Advantech at that time

Q: along the way, from fighting alone in the IPC market to entering the era of a hundred schools of thought contending in the IPC industry and the Warring States period, apart from the exchange loss in 2003, which caused the EPS to fall to NT $3.17 that year, what impressed you about the growth stage of Advantech? Could you tell us something about Advantech's growth

answer: in my impression, except that the exchange loss in 2003 was a major crisis, there was no fundamental crisis that shook the company along the way. There are three growth stages in the process of Advantech's growth. The first wave is the effort stage of the founders, the second wave is the stage of creating the concept, vision and purpose of Advantech, and the third wave is the stage of using Advantech goodtogreat three circles and the "flywheel concept"

the first wave was when I worked at HP. Seeing the demand of customers for integrating industrial automation systems and the trend of connecting computers and equipment at that time, I came out with hechunsheng and huangyumin, who were colleagues of business and engineers at that time, to set up Advantech focusing on the Si market. Since the first day of establishment, the company has taken the use of existing technology to achieve application innovation as the concept of future development

in the second wave of growth, due to the influence of two books at that time, i.e. "everlasting foundation" and "from a to a+" respectively, I made a lot of plans in terms of business philosophy and corporate objectives, and transformed the intangible ideals in the book into substantive ideas, visions and objectives, which became one of the bases for the future enterprise development of Advantech (indirectly derived the later flywheel concept)

the third wave of growth is based on the concept of goodtogreat three circles and flywheel. It not only combines the three common points of mission, GrowthModel and focus goal to form the business concept and model of Advantech, but also shapes the current image of the company in the stock market and society. It is based on the concept of long-term and stable investment, with foreign investment accounting for more than 50%

Q: since the advent of the computer age, the PC and IPC industries have been in a situation of clear barriers. However, due to the fact that PC factories are seeking high gross profit market, they have tried to enter the IPC market in recent years. What do you think of this trend? Will it affect the IPC industry when PC factories continue to cut into the IPC market

answer: this question has been raised and discussed continuously since the founding of Advantech, but the answer is very simple, but it is impossible. Although PC factories and IPC factories both take the motherboard (MB) as the main axis of development, IPC uses special MB and needs to focus on production, while general commercial PC factories only allocate some energy to develop IPC field. Due to their inability to focus, they are unable to enter the IPC market for a long time. Even if some manufacturers enter this market, the difference between their products is basically not large

the difference between PC industry and IPC industry is similar to the difference between Bento industry and catering industry. Although both of them are supplying food materials, the Bento industry is always doing a simple Bento business (such as the OEM of Nb and DT), while the catering industry is divided into Italian food or hot pot shops (such as various fields of IPC). Therefore, the influence of PC factory on IPC factory is very limited, but strictly speaking, IPC factory will not only enter the low gross profit trend of PC factory in the future, It will even go into more detailed professional fields

however, when it comes to the future changes in the IPC industry, it will mainly be the structural changes. Once the IPC supply chain is formed, the IPC ecology may be changed. Take the alliance between ASUS and Advantech as an example. At present, we can see whether the cooperation between the two sides has the opportunity to form a supply chain system. If the cooperation between the two sides is successful, it will have the opportunity to cause ecological changes in the IPC industry

in addition, the current development of Yanshuo is not the same as the outside world thinks. Its revenue has exploded. Instead, it is gradually forming the link between IPC and PC value chain. As the technology and parts are shared by ASUS and Advantech, the service concept is different

Q: from the second half of 2005 to the present, various manufacturers have shown a high growth phenomenon that has not been seen in the past. How do you view the growth of IPC and what trend the IPC market will develop in the future

answer: the development prospect of IPC is very promising. It is expected that IPC will have a high growth in the next 5 to 10 years. The main reason is that with the maturity of PC related technologies, different application and service fields have been developed in succession, and have been deeply integrated with retail, medical, entertainment, factory, public service and other industries. In particular, after the maturity of PC technology and the decline of component prices, it indirectly accelerates the speed of PC entering the vertical integration market

however, IPC will develop in the field of professional division of labor in the future. In the past, IPC manufacturers used to follow the generalpurpose market, including Advantech, Weida power, Kontron and other product lines, with a small number of varieties, just like the concept of grocery store. However, the new generation of IPC manufacturers broke away from the general application concept and focused on developing a single professional field

according to the current situation, The future development of IPC ASTM defines filler as "The exhibition of inert materials added to plastics to improve strength and various properties, or to reduce costs, can be roughly divided into four professional fields. The first is retail services, entertainment, finance and other service industries, the second is the medical field, and the third is the image monitoring field. Although the image monitoring field does not belong to the traditional IPC, it also takes the downstream Si manufacturers as the development axis, and the more representative manufacturers are odd and even. Fourth It is in the field of industrial automation and environmental control. This field is dominated by IPC foreign investors. At present, Linghua is the manufacturer in Taiwan who has a deep understanding of industrial automation

Q: with the IPC market gradually moving away from the universal platform and towards a single professional field, what services will IPC manufacturers take as their main operating policy in the future

answer: at present and in the future, IPC manufacturers will provide two services, namely, services in a single professional field and designmanufacturingservices (DMS)

IPC manufacturers that develop in a single professional field are unlikely to develop in other fields. In particular, about hundreds of employees of these manufacturers develop their product lines in a single field and serve Si manufacturers in this field. This is because the market in a single field is large enough for these manufacturers, such as endpoint sales system (POS), information query system (kiosk), etc. On the contrary, the general IPC market is like the tip of an iceberg floating on the water

at present, Feijie, Wufeng and Zhenhua are manufacturers focusing on the development of POS field. Compared with general-purpose IPC manufacturers, companies focusing on the development of a single field seem to have high share prices and fast growth. On the contrary, the number of general-purpose IPC manufacturers will gradually decrease in the future

take flour, noodles and restaurants for example. Flour is used as raw material, and the value-added is not high, so the price is low and the profit is not high. On the contrary, noodles and restaurants can derive more value-added services, and the value and profit will be higher. General purpose IPC is just like flour raw materials, which cannot show its value. However, when it comes to the professional field, just like noodles and restaurants, after changing a variety of foods or restaurants, its added value also brings high profits to the manufacturers

dms mainly focuses on customized OEM services in different fields, such as part oriented, embedded IPC, industrial display, etc., in the form of OEM services for consumer electronics, liquid crystal display (LCD), notebook computer (NB) and other manufacturers by PC OEM. At present, Weida power, Youtong, etc. are typical DMS manufacturers, with the main characteristics of small scale and zero specialization

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