23 March 2018
Some of the buses that run in Taipei city are equipped with sensors created by leading Israeli start-up Mobileye. Photo: Mobileye
Some of the buses that run in Taipei city are equipped with sensors created by leading Israeli start-up Mobileye. Photo: Mobileye

Taiwan invests in Israeli hi-tech, rides the startup wave

Some of the buses that ply the streets of Taipei and Taoyuan cities in Taiwan are equipped with artificial visual sensors that see threats ahead and warn the drivers of them. The technology was created by Mobileye, an Israeli firm. It is the most prominent example of cooperation in high technology between Taiwan and Israel.

“Mobileye is the leading company in its field in the world,” said Asher Yarden, representative of the Israel Economic and cultural office in Taiwan. “It improves security for the vehicle and the driver and cuts the costs of insurance.” In May 2017, Intel paid US$15.3 billion to acquire Mobileye, the most expensive acquisition ever of an Israeli high-tech company.

The man who sold the Mobileye system to the Taipei and Taoyuan city governments was Edward Wen, secretary-general of the Taiwan Israel Chamber of Commerce, set up in 2011. He is responsible for selling the product in the Taiwan, Indonesia and Malaysia markets.

“Israel and Taiwan are complementary to each other,” said Wen. “Israel is most famous for innovation and we are short of it. We have been used to OEM (Original Equipment Manufacture – making goods for another company). This is a good model for cooperation. Israel does not have mass production. Asia has big markets.”

Wen said that Taiwan firms had been slower than Chinese entities in investing in Israel, especially in start-ups. “Chinese venture capital (VC) is braver and faster than Taiwan VC. It is prepared to take more risks. Taiwan VC invested in OEM, which carried no risk. Now our venture capital is looking where to invest. The rate of return from Israeli start-ups is the highest in the world.”

Since World War Two, Taiwan companies have focused on their biggest export markets – Japan, the United States and the European Union. These are the countries with which they are most familiar. Israel is a new market for them. Each year Wen’s chamber takes delegations of Taiwan companies to Israel to familiarize them with the country and its investment opportunities.

In 2016, bilateral trade came to US$1.59 billion, a 15.6 percent increase over 2015. Of the total, Taiwan imported US$929 million worth of Israeli goods and exported US$629 million to Israel—mainly electronics, computers, car parts, motorcycles and bicycles. Taiwan motorcycles made by Sanyang and Kymco have a substantial share of the Israeli market.

Taiwan firms have invested about US$200-300 million in Israel. Two companies have set up research and development centers there. They are Hiwin, based in Taichong, one of the island’s biggest makers of robots; and Winbond Electronics, which produces semiconductors and several types of integrated circuits, including personal computer ICs.

Winbond is the largest brand name integrated circuit supplier in Taiwan and one of the biggest suppliers of semiconductor solutions worldwide.

As for Hiwin, it spends 10 percent of its annual revenue on R&D, and has research centers in Germany, Japan, Russia and Israel, as well as in Taiwan, according to a company statement.

On February 9, Taiwan’s Ministry of Science and Technology said it will set up a new division in Israel in June this year to tap the nation’s expertise in technological innovations and business models. “Taiwan can learn from Israel about using a minimum of resources to achieve the greatest technological innovations,” a ministry official said.

According to Yarden, many Taiwan companies are yet to recognize the potential of Israel. “In April 2015, the two countries signed a cooperation agreement in R&D. It was the 54th such agreement for Israel and the first for Taiwan. So it took a little longer. It is now in progress. It benefits both countries and the world, because the outcomes help everyone.”

In September 2017, Kuomintang legislator Hsu Yu-jen launched the Taiwan Israel Innovation Platform, aiming to boost high-tech exchanges between the two sides.

“The platform can help promote exchanges between the two nations’ private, public and academic sectors on several fronts, including information security, water-related infrastructure, agricultural technologies, augmented and virtual reality applications, self-driving cars and artificial intelligence. It can also help Israeli companies find Taiwanese firms for merger or acquisition (M&A) opportunities,” Hsu said.

“I hope Israeli incubators will invite Taiwanese firms to set up their own incubators in Israel, so that Taiwanese innovative start-ups would have more chances to meet Israeli investors,” he added. The preferential tax rates the Israeli government has set for angel investors and foreign venture capital have made it an innovation haven, with Internet-related industries accounting for 6.5 percent of the nation’s GDP, he said.

Meital Margulis Lin, an Israeli resident of Taiwan, is chief executive of “Connecting Worlds”, a company that promotes exchanges between the two places. “It is highly important for Taiwan to learn and adopt new ideas related to innovation and creativity. Israel’s qualities are beneficial for inventing new things and breaking boundaries, while Taiwan’s qualities are beneficial for scaling up and building high-quality products in a very efficient way,” she said.

During February 6-11, the Israeli office had an excellent opportunity to introduce its country to the Taiwan public. It was the ‘country of honour’ at the annual Taipei International Book Exhibition, which attracted 530,000 visitors. Its large pavilion introduced the economy, inventions, culture and products. The offerings include many books, such as “Israel – Start-up Nation”, translated into many languages, including Chinese.

In 2016, 7,500 Taiwanese went to Israel, including Christian pilgrims, tourists, business people and volunteers. Among them was Pastor Alex Cho, chairman of the Taiwan Holocaust Peace Museum, who has been there 12 times. Last year he led over 600 members of his congregation, to fulfil his mission of educating the Christians of Taiwan about Israel, the Jewish people and the Torah.

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Hong Kong-based journalist and author. He had worked as a correspondent for the South China Morning Post in Beijing and Shanghai.

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