Interview

Ming-Chin Wu is President of Advantech Co. Ltd. CE Asia met with him at this year’s Hannover Fair to discuss his company’s business and offerings, as well as his vision of an open ‘eAutomation’ world.

CE Asia: Give us a breakdown of Advantech’s business and the industries it serves?

Ming: If you look at our annual revenue, in 2005 we did around US$416 million and our forecast for 2006 is US$440 million. The US represents around 30 percent of our total revenue. That figure is around 20 percent for Europe. As for the remainder, 19 percent of that comes from China. The rest of our business comes from Taiwan, Japan, Korea, South Asia Pacific and emerging territories such as South America, Middle East, South Africa and Eastern Europe. Our largest manufacturing facilities are located in Kunshan, China and in Taiwan.

We are in the e-platform services industry and there are two segments in this industry. One is to serve the office and the home end-users. The other is industrial. Here, we serve the system integrators for the various vertical markets. We have the e-buildings, public services, medical, ‘eAutomation’ and network appliance. If you look at our markets, it is very fragmented. So in our business, flexibility and customization is very important.

CE Asia: Which is the biggest industry that you serve?

Ming: If you look at our revenue breakdown, there is not one single customer that takes up more than five percent of our total revenue. We customize from the foundations of our core products to service different vertical markets.

CE Asia: Having such a diverse pool of customers, how do you service them?

Ming: We use our ‘eAutomationPro’ and ‘ePlatformPro’ to serve our general account – to provide one-stop shopping and components selling to help us release our direct sales to focus on our key accounts. With this kind of approach, we can provide online professional support. We have also just lunched our online chat services one to two months ago and it is rapidly gaining in popularity, especially in China, Taiwan and USA. When the customer has a question, he/she can log in to the site where our assistants can provide the necessary support. At the moment, it is receiving the most traffic in China, and we are shooting for a 24/7 service in this area.

CE Asia: How much of your company’s emphasis is on R&D?

Ming: A minimum five percent of our excess revenue is invested in R&D. Twenty-four percent of our total employees are in engineering and R&D. And overall, 45 percent of our R&D engineers have masters degrees or above. That means we maintain a high quality pool of staff, and on average, we introduce about ten patents annually in the last 23 years.

CE Asia: How do you maintain employee co-operation and motivation?

Ming: We organized the ABLE100 (Advantech Beautiful LifE)—which is our welfare committee that helps inspire personal growth in our employees. With the aim of inspiring employee morale, uplifting R&D performance, and enhancing product quality, we’ve created an environment that encourages employees to create innovative product designs, with positive results. For example, our R&D director won the Personal Accomplishment Award at the 2005 Industrial Technology Advancement Awards hosted by MOEA, and some of our products have been awarded the Symbol of Excellence as well. Employees who win awards with Advantech

are not only celebrated, but also rewarded.

CE Asia: Tell us about the motivation and goal behind your company’s 3 circle principle?

Ming: We started the 3-circle principle for Advantech two to three years ago, which was inspired by the book ‘Good-to-Great’. Our mission is to utilize visionary computing to empower ‘eWorld’ innovations. Our focus is to become the global leader of ‘ePlatform’ services for ‘eWorld’ solution integrators, and our growth model is having segmented business units powered by global trusted brand.

CE Asia: How has automation evolved to become more open?

Ming: Let’s look at the trend from the PC age. The mainframe age started before 1978 to the advent of mini-computers in 1983, and the PC age spanned from 1983 to 2003 – this is what I refer to as the PC age. The trend for the PC era is characterized by changes from proprietary to open systems. Without IBM’s involvement in the PC age, the PC could not have gone public.

I think automation follows the same trend. The 1970s was the age of relays and in the 1980s, we evolved to PLCs, which is simplified automation. In the open age, with the popularity of PCs, users want to utilize PCs as the controller. At the time, we coined the term that “automation has been empowered”. Now, because Ethernet and embedded systems are gaining in popularity, automation is becoming more open.

CE Asia: What do you think the security issue in this case?

Ming: I think security will be the issue but I think this issue will be resolved in the future. Because I think the user or the customer don’t like to be bounded. If you go back to the mainframe or minicomputer age, people had to buy peripherals from proprietary companies – they had no choice. In this age, technologies like wireless will get more and more popular, with improved security. So this kind of open automation will be the trend of the future.

At Advantech, we utilize our open computing technology and our I/O and vertical market domain knowledge to drive our professional services. I believe our company has unique offerings that do not have direct competition in each vertical market. But at the same time, I don’t think we are too diverse. Our focus comes in three segments – automation market, industrial Ethernet enabled networking, and PC-based control platform plus controlled I/O.

These three segments will be the main product lines for Advantech’s ‘eAutomation’ in the future. And we put them together with Ethernet-based open software.

CE Asia: Which areas of industry do you think are sizable and fast growing?

Ming: If you look at HMI, the business size in Europe is probably about US$1 billion. If we can take 5 to 10 percent, we will probably have US$50 to 100 million worth of business in this area. I think industrial networking is a very fast growing segment, and we will focus on its development.

CE Asia: Finally, share your views of ‘Fieldbus vs. Ethernet’ in industrial networking.

Ming: I feel that in the automation market, within the plant, certain levels still need to be proprietary to control mission critical areas. But in order to bring data into the outside world, we need to have Ethernet or wireless – open automation. For this to become the dominant trend, it may take the next 10 to 20 years, but I believe this will be the trend. Fieldbuses will, of course, remain strong and have a market. We will work together in partnership to bring total connectivity in the automation world.