Analysis

‘Chipageddon’: How Taiwan is battling the global chip shortage

Semiconductors are the lifeblood of the modern world, but now there is a critical shortage worldwide and Taiwan is at the center of it. In May, Japanese automobile giant Nissan was forced to put the brakes on its vehicle production and cut its manufacturing output for 2021 by 500,000 units. The reason: a severe shortfall of a coin-sized computer chip needed to power its vehicles. This chip shortage, which has crippled the global automobile industry for the past 18 months, has now spilled over to other sectors. But effort and flexibility among logistics partners are helping to mitigate the crisis and offer ideas for how processes might be improved in the future. Chips, also known as semiconductors, power the modern world. Almost anything electronic, from phones, cars to even an alarm clock, relies on these nano-sized silicon wafers to function. Last year, Taiwan dominated the global market share for semiconductor contract manufacturing, accounting for more than 60 percent of global revenue. “We’re the world’s chipmaking factory. Semiconductor manufacturing is one of the most important industries for Taiwan,” said DJ Shieh, Managing Director of DHL Supply Chain Taiwan. But in the past year, a global pandemic and one of the worst droughts in half a century has severely disrupted production there. Taiwan is also caught in a global tech war between the United States and China. The triple threat has led to a semiconductor shortage crisis so severe that it has been dubbed “Chipaggedon”. “The global chip shortage is affecting every industry. I think very few players expected the sharp fall in supply,” said Shieh. “We’re doing our best to ensure the seamless flow of goods for our semiconductor customers to minimize the fallout, and hopefully resolve, this supply chain crisis.” A perfect storm The Covid-19 pandemic was the catalyst for this […]

Chinese startups dominate APAC VC landscape

Chinese startups continue to attract a major chunk of the venture capital (VC) investments in the Asia-Pacific (APAC) region. A total of 3,012 VC funding deals were announced in China during Q1-Q3 2021; the disclosed funding value stood at US$72bn. An analysis of GlobalData’s Financial Deals Database reveals that China accounted for close to 50% of the total VC funding deals announced in the region and around 60% of the corresponding deal value. August 2021 witnessed improvement in VC funding activity, both in terms of value as well as volume, but the momentum could not be sustained. September witnessed decline in VC funding activity both in terms of value and value compared to the previous month. Aurojyoti Bose, Lead Analyst at GlobalData, comments: “The fact that the China startup ecosystem continues to dominate the APAC VC landscape despite the COVID-19 pandemic and regulatory shakeup is a testament to its potential.” Some of the notable VC funding deals announced during January to September 2021 in China include US$1.6bn raised by SVOLT Energy, US$1.5bn capital raised by Horizon Robotics, US$750m capital raised by Beijing Shihui Technology, US$700m funding raised by Abogen Biosciences, US$700m funding raised by Dingdong Maicai and US$600m raised by Qingju. Mr Bose concludes: “Despite investors adopting a cautious approach and deal activity remaining volatile for most of the period, China managed to witness the announcement of some big-ticket deals, which helped it register a sizeable cumulative funding value.”

China could surprise the world at Glasgow climate talks

Former U.S. Vice President Al Gore is hopeful China and the United States will set aside their differences at U.N. climate change talks in Glasgow, just as they came together in 2015 to help hammer out the Paris Agreement. Speaking in an interview broadcast on Monday at the Reuters Impact conference, Gore also said China could surprise the world by bringing forward one or both of its targets for reaching peak emissions and becoming carbon neutral. Gore said frictions between China and the United States, the world’s top two greenhouse gas polluters, had to be taken into account. Beijing and Washington have clashed over alleged human rights abuses in Xinjiang and Hong Kong, as well as military activity in the South China Sea. But Gore, who shared the 2007 Nobel Peace Prize for his work on informing the world about climate change, held out hope that tensions between the two could ease at the U.N. COP26 talks in Glasgow, Scotland, which start on Oct. 31. “It’s true that in the earlier part of this year … it didn’t seem as if the stars were aligned,” he said. “Since then, we have seen a welcome pledge from (President) Xi Jinping at the U.N. General Assembly, announcing that China will halt its financing of overseas coal plants.” Xi announced last month that China would stop building new coal-fired power plants overseas after similar pledges by Japan and South Korea earlier this year. U.S. climate envoy John Kerry had urged China to follow their lead. Ahead of COP26, global business leaders and politicians are taking part in the Reuters Impact conference to discuss efforts to mitigate climate change and drive sustainable growth. Gore said he believes Xi could pull forward one or both of the climate targets that he set at last year’s U.N. General […]

Red Roulette

An Insider’s Story of Wealth, Power, Corruption and Vengeance in Today’s China In the headline-making and bestselling tradition of Bill Browder’s Red Notice comes a riveting memoir from a man who rose within the ranks of China’s ultra-rich only to see his business partner-wife mysteriously disappeared. After the Communist Revolution, Desmond Shum’s grandfather, a lawyer, had one chance to leave China, and instead chose to stay. The government shut down his law firm and seized his house. Officials marked his family as belonging to a ‘black category’ that included former landlords and rich peasants, meaning the Shums would be stigmatised and impoverished. As Desmond was growing up, he vowed his life would be different. Through hard work and sheer tenacity Shum went to college in America and returned to China to make his name in business. There, he met his future wife, the highly intelligent and equally ambitious Whitney Duan. Whitney and Desmond formed an effective team and, powered by a set of relationships they formed with top members of the Red Aristocracy, vaulted into China’s billionaire class. Soon they were developing the massive air cargo facility at Beijing International Airport, and they followed that by developing one of Beijing’s premier hotels. They were dazzlingly successful, travelling in private jets, funding multi-million-dollar buildings and endowments, and purchasing expensive homes, vehicles and artwork. But in 2017, their fates diverged irrevocably when Desmond, while residing overseas with his son, learned that his now ex-wife Whitney had been disappeared – consigned to some unknown fate – along with three co-workers. In Red Roulette Desmond Shum pulls back the curtain on China’s ruling elite and tells the story of a remarkable woman who rose to prominence in a strongly patriarchal society. Written from a desire to reveal the real truth of what is happening inside China’s wealth-making machine, this eye-opening tale […]

The biggest mistake a manufacturer can make is to focus on cost cutting

-Ishan Galapathy In 2009, global cereal giant Kellogg’s announced an aggressive three-year, $1 billion cost reduction scheme. The savings were to be delivered through overall supply chain improvements that focused on process optimisation, asset utilisation and waste management. The scheme was christened Project K-LEAN (Lean, Efficient, Agile, Network), and it was primarily driven to replicate the success achieved at two North American Kellogg’s manufacturing plants. Given the clear objective of Project K-LEAN (rapid cost savings), every initiative delivered exploited short-term, bottom line improvements like headcount reduction, maintenance budget cuts and plant shutdowns. Although the organisation over delivered on its ambitious $1 billion promise, it left its teams with scars, bruises and loss of trust, which made it difficult to engage employees in any further productivity improvement initiatives. This is not an isolated case. In September 2020, Kraft Heinz announced a $2 billion cut in costs over five years as a way of driving growth. Since the Kraft Heinz merger in 2015, the company has lost nearly half its stock value. An even harder pill to swallow for Kraft Heinz is that its stock keeps tumbling while the S&P 500 Index for the same category keeps rising. When the cost-cutting plan was announced, analysts and investors didn’t buy-in that businesses such as Kraft Heinz could turn around its performance and increase shareholder value by ‘cutting’ costs. In comparison, a company such as Proctor & Gamble (P&G) that focuses on processes that deliver cost reductions as an outcome truly operates with a world-class supply chain. Don’t take my word for it—Gartner’s latest 2021 global top-25 supply chain report lists P&G as one of five organisations in the ‘masters’ category, which means it has maintained a top-5 ranking for at least seven out of ten years. In 2013, I was fortunate to visit […]

India’s first current account surplus since 2003 may not sustain as trade deficit set to widen, says GlobalData. India recorded an annual current account surplus for the first time in 17 years in 2020 due to lower trade deficit amid depressed import demand with closure of economic activities due to the COVID-19 induced nationwide restrictions. However, the current account surplus may not sustain as trade deficit is forecasted to widen from US$23.3bn in 2020 to US$53.9bn in 2021 with the re-opening initiatives, says GlobalData, a leading data and analytics company. The current account balance showcases the gap between the country’s overall foreign receipts and payments and highlights the nation’s external sector’s robustness. India’s current account which recorded an average annual deficit of 1.9% of GDP during 2004-2019 turned into a surplus of 1.0% of GDP in 2020. The main driver of India’s current account surplus was lower imports due to subdued domestic demand and lower prices of oil, which narrowed down the trade deficit by US$102.8bn in 2020. Thus, while exports weakened by 13.8%, imports contracted by a massive 26.6% in 2020. Shruti Upadhyay, Economic Research Analyst at GlobalData, says: “Most Indian states are embarking on reopening initiatives and with the resumption of economic activities domestic demand is expected to rise, which is anticipated to drive the growth of exports and imports. “GlobalData forecasts the imports and exports to grow at an average annual growth of 6.4% and 5.2%, respectively, during 2021–25. Consequently, India is expected to record a current account deficit of 1.74% of GDP on an average during 2021–25, as per the IMF estimates.” India is the third largest consumer of the crude oil in the world, with an import dependency of almost 85%, playing a vital role in total import growth of the country. The reduction in […]

CropLife Asia echoes FAO call to transform food systems

With the release of the United Nations (UN) 2021 State of Food Security & Nutrition in the World (SOFI) report, CropLife Asia highlighted the need for the region’s food value chain stakeholders to work together in transforming our food systems to better enable food security, improved nutrition, and affordable healthy diets for all. The challenge of achieving the UN’s Sustainable Development Goal (SDG) 2 of ‘zero hunger’ globally by 2030 has grown even more complicated with the broad impact of the Covid-19 pandemic. In this latest UN report, it is estimated that the number of people affected by hunger worldwide in 2020 was between 720 and 811 million people. This is a marked increase of over 100 million more people than in 2019. The prevalence of undernourishment (PoU) has also climbed up to around 9.9 percent in 2020 compared to 8.4 percent the previous year. This new report also confirms a sadly familiar refrain for Asia: our region is failing to deliver food security for far too many – particularly among the more vulnerable parts of society. Asia continues to be home to the greatest number of undernourished people with 418 million suffering from hunger in 2020. “The challenge of feeding Asia and the world requires us to explore all possible solutions. This can only be achieved through greater collaboration with others, as multi-stakeholder approaches are crucial for transformation of our food systems,” said Dr Siang Hee Tan, Executive Director, CropLife Asia. “The plant science industry champions innovation in both crop protection and plant biotech, as well as precision and digital agriculture solutions to benefit both people and the planet.” “The innovative technologies of the plant science industry have a key role to play, but it is only one part of the solution,” Dr Tan added. “Ensuring that an ample […]

The three pillars of China’s booming start-up ecosystem

Once known as the “world’s factory”, China has risen to become an economic superpower in recent decades. In fact, the nation is expected to become the world’s largest economy in 2027 in terms of nominal GDP. Aside from its sheer size, China has successfully transformed its economy from manufacturing towards nurturing an environment to enable high-tech innovations: It is home to more than 150 unicorns, leading the world in the field of AI, robotics and computer vision, to name just a few. This start-up scene wasn’t built overnight, but through decades of efforts by the Chinese government, state-owned enterprises, large corporations, universities and many more stakeholders. Here is a breakdown of the secret ingredients that have made China a tech powerhouse, through the lens of the World Economic Forum’s own community of trailblazing start-ups, this year’s cohort of the Technology Pioneers. 1. Innovation-friendly policies The Chinese government played a crucial role in laying out foundations for innovation. In 1978, Chinese leader Deng Xiaoping lured foreign investments and capital with the Open Door Policy, aimed to encourage foreign businesses to set up offices and do business in China. Alongside this policy, the government also created Special Economic Zones in four different regions, including Shenzhen, to further attract foreign business. The resulting urban growth allowed these cities to position themselves as attractive start-up hubs for the 21st century. The government also created the Chinese Government Guidance Funds to facilitate public-private investment. These funds – collaborations between central, provincial and local government – focus on investment into industries with emerging and high-potential technologies, including AI and robotics, as well as the digital transformation of traditional industries. China’s next five-year plan has highlighted industrial internet and domestic industrial software as key focus areas for government policy. As a result, regional governments are rolling out plans, supported […]

Tremco CPG and USL Group announce collaboration in Asia Pacific

On 1st June 2021, Tremco Construction Products Group (CPG) Asia Pacific (APAC), already home to nine distinguished construction brands across different product offerings, began supplying USL Group brands in the Asia Pacific region. The USL portfolio will be integrated into Tremco CPG for the Asia Pacific region under the leadership of Dr. Abu Saleh Mohammod, business development director of the Infrastructure segment, who will drive the growth of complimentary USL Group product brands including solutions from Matacryl, Pitchmastic PmB, Nufins, PDS and Prime Resins. The route-to-market collaboration will see USL Group’s range of bridge deck waterproofing, drainage, movement control technologies and construction chemicals marketed by Tremco CPG APAC, effectively solidifying Tremco CPG’s position as a one-stop solution provider of construction products. “This partnership offers significant value to our customers and stakeholders and unlocks new business opportunities for Tremco CPG APAC, especially within the infrastructure sector,” explained Saleh. USL Group is a leader in the structural protection and movement control construction landscape. Established in 1981, USL Group manufactures, supplies, and installs a wide range of specialist construction products across the globe. USL Group’s expertise in infrastructure and civil engineering, coupled with its strong presence in distribution channels and innovative specialty coatings, allow them to deliver superior and efficient engineering solutions. The addition of USL Group brand’s diverse and high-quality range of products is timely, and the newly formed symbiotic relationship will strengthen the expansion of the infrastructure segment while complementing Tremco CPG’s singular streamlined approach for architects, developers, and contractors. Saleh added, “Together, our powerhouse of brands and strategic technologies will cover many aspects of a construction project, so we look forward to this exciting new chapter ahead of us as we build a joint successful future.”

New possibilities with LifecycleIQ Services

To help companies innovate faster and improve efficiencies during the age of digitalisation, Rockwell Automation is evolving its service and solutions capabilities and launching a new brand: LifecycleIQ Services. The new brand represents the expanding ways that customers can engage with Rockwell Automation technology and highly trained professionals to improve their performance and reimagine what’s possible across their industrial value chain. LifecycleIQ Services provide the transformative partnership that customers need and expect today. By combining digital technologies with expansive human know-how, the services help companies work faster, smarter and with greater agility at every point in their business cycle. The services can help companies realise the power of a Connected Enterprise during the design, operations, and maintenance stages in greenfield and brownfield facilities. “LifecycleIQ Services create a more intimate customer engagement model, one that can help companies not only solve problems, but also see new possibilities in production and transform them into reality,” said Frank Kulaszewicz, senior vice president, Lifecycle Services at Rockwell Automation. “We’re investing in providing a wide range of holistic services to help companies be more productive, safe and secure anywhere in a product, process or plant lifecycle.” One challenge faced by many industrial players in Asia-Pacific is how to adopt smart manufacturing technology quickly whilst seamlessly integrating legacy equipment and machinery. LifeCycleIQ Services help to address this unmet need holistically, enabling enterprises to be future-ready by incorporating agility and flexibility in both infrastructure and processes. Driving efficiencies also continues to be increasingly important to businesses across every sector in the region, with growing attention on sustainable operations. LifeCycleIQ Servicesnenables customers to better plan and service every aspect of the plant, from design to safe operations, enabling reduced energy usage, minimised wastage, and maximised output. Industrial companies can use LifecycleIQ Services to achieve outcomes like:Capturing more value […]

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