【Sharing】Transformation in next 30 years: Q&A with WPG Holdings CEO Frank Yeh
Frank Yeh, CEO of WPG Holdings, is optimistic about the overall IC industry, which he expects will be driven by demand for Chromebooks, 5G handsets and others arising from the stay-at-home economy, and by new energy vehicles.
But CEO of one of the world's top IC and components distributors, told Digitimes that while industry outlook next year is positive, more attention should be paid to the next 10 years or the transformation that may take take place 20 or even 30 years from now.
Photo: Michael Lee, Digitimes, December 2020
Q: What's outlook for the semiconductor industry and distribution channel next year?
A: The COVID-19 epidemic has fueled demand for remote work and learning, with the strong shipments for Chromebooks in the education segment and for flat panel TVs, notebooks and others in the consumer electronis segment. These are all driving the demand for CPUs and various ICs.
It is worth mentioning that the EV trend is already unstoppable and the EV era can be said to have officially taken off. This is a brand new opportunity for the existing semiconductor industry.
For semiconductor industry, from upstream, midstream to downstream, the market will still be a prosperous one next year, and the development trend of 5G and EV will continue to push forward, so in the future, TSMC, the foundry leader, will still need to build more fab and production capacity.
Q: What is the impact of the US-China trade war, the outcome of the US presidential election, and the arrival of the "post-Huawei" era on the industry?
A: In fact, Huawei Group has invested heavily in HiSilicon, in line with China's IC self-sufficiency campaign. But the Trump administration has indeed hit where it hurts most, namely the semiconductor equipment. Huawei and HiSilicon didn't see it coming so fast.
Recently, Huawei formally spun off the Honor cell phone business, which should still create some business opportunities for Taiwan's semiconductor supply chain. But the actual internal plans of Huawei are still unknown. With the conclusion of the US presidential election, it seems that the attitudes of both parties in the US towards China do not differ much. But the Biden camp has stated that there is still room for "appropriate cooperation" amid the competition with China.
Q: The world seems to continue heading towards a G2 (US and China) structure where supply chains have to set up separate, regional operations. With the global supply chain broken, how do companies respond?
A: I have a positive view on the IC industry in 2021, and Taiwan's semiconductor supply chain has a rosy outlook because of the opportunities arising from pandemic. But it is time to think about the key to industry transformation in the next 10 years or 20 years. And I would even suggest we look further ahead in the next 30 years.
In fact, if we look at the example of the development of Taiwan's semiconductor industry, we can see that 35 years ago, the vision of the Kwoh-Ting Li - the architect of Taiwan's economic miracle - and Morris Chang built up Taiwan's powerful semiconductor industry step by step. TSMC is now dubbed the "guardian of the nation," which clearly indicates its importance for Taiwan's economy. But TSMC had difficult times during 1985-1995.
Taiwan faces a lot of changes in the future, such as the "new normal" of working from home, demographic transformation, digital natives entering the job market and digital transformation.
The logistics-as-a-service (LaaS) smart warehousing model I am proposing is to further reduce transaction time and cost and to better serve customers. At present, the first phase of WPG's South China smart warehouse project is expected to be completed by mid-2021, and the second phase is expected to be completed by the end of 2021.
The transformation of the industry must be built on digital platforms that enhance internal operations at enterprises.