““Taiwan Business Alliance”Taiwan Business Alliance”International cooperation and business International cooperation and business

opportunities for Taiwan’s cloud opportunities for Taiwan’s cloud computing industrycomputing industry

Business strategy evolution:Changes for Taiwan ICT players

Manufacturing capacity and technology investment are key strength of Taiwan ICT players

Acquiring foreign investment can help support the completion of the supply chain

Hardware and software resources are highly integrated, leading to better adoption and quicker transitions for a rapidly changing technology market.

Rethinking the traditional hardware-centric concept and implementing a more balanced development plan – a mix of hardware manufacturing and software services

Responding to rapid changes in mobile client devices

Capitalize on co-development opportunities with upstream industry leaders

Taiwan ICT players provide a good platform for quick integration for business and technology development

Reform the mindset and leverage your own strengths to compete with global players

Cloud application: Global business opportunities for Taiwan’s ICT industry

Information equipment vendorsNew business potential for PC Servers, storage equipments and data center facilitiesTaiwan’s ICT industry will be one of the first to benefit from cloud computing

Mobile device manufacturersA wide product range from mainstream notebook PCs to handsets and automotive & telematics devicesEmerging business opportunities for Internet devices

System integrators and telecomsProvide essential software services or support for Taiwan hardware manufacturersPowerful integration between hardware makers and big telecom service providersCreate more versatile and innovative services

Taiwan perceptions for mobile cloud computing business

Reach 10 billions internet devices worldwide

Including handsets, notebook PCs and tablet PCs

Handset is the core device for mobile Internet applications

Used for accessing various cloud applications

1.4 billions handsets to be sold in 2010

358 millions mobile devices in 2010

Emerging markets increase importance

Core applications

Infotainment, Productivity

Communications, Social Networking

Over 1 billion annual handset shipments help boost cloud applications

Source:DIGITIMES ， 2010/4

Unit: million sets

2008~2013 worldwide handset shipment forecast

Smartphones move into mainstream Mobile device and smartphone shipments, 2009-2014

82111

148185

214 239181

247

322384

439497

0

100

200

300

400

500

600

2009 2010(f ) 2011(f ) 2012(f ) 2013(f ) 2014(f )

Non-mobi l e devi ce Smart Phone

Unit: million sets

Source: iSuppli, compiled by DIGITIMES, 2010/3

Cloud storage applications:Proving traction in 2010

Source: Chetan Sharma Consulting, 2010

Taiwan cloud storage solutions and business opportunities

Start from data synchronization and integration technology and keep on a consistent path to industry leadership

Apple, Google, Nokia and Microsoft all follow the same steps

Public cloud, private cloud or government cloud: All rely on massive storage equipment

Technology and business opportunities of backend storage servers

Container stacking cloud computing data centers: System integration business for hardware and software players

Wistron, Inventec and Quanta aggressively push the market

Strategic partnership with industry leaders helps to accumulate skills and experience needed to integrate hardware and software resources

Storage solutions and business of client devices

Increase access speed with SSD components

Help Phision and Silicon Motion Technology to upgrade technology

Bring in Intel and Toshiba as strategic partners

Cloud storage concept

Source: DIGITIMES Research,2010/4

High speed data access with build-in SSD devices

SSD industry overview and key players

Source: Gartner 、 Techno System Research, compiled by DIGITIMES, 2010/3

Mobile cloud computing service Mobile cloud computing service development approach:development approach:

The app storeThe app store

Apple App Store:A big push for applications

15002000

3000

200 500 10005007500

15000

35000

65000

85000

133979

0

500

1, 000

1, 500

2, 000

2, 500

3, 000

3, 500

J ul ' 08 Oct' 08 J an' 09 Apr' 09 J ul ' 09 Sep' 09 J an' 10

0

20, 000

40, 000

60, 000

80, 000

100, 000

120, 000

140, 000

160, 000Cumul ati ve number of downl oads

Appl i cati on Number

Unit: softwareUnit: million times

Source: Apple computer Inc., 2010/1, compiled by DIGITIMES, 2010/3

App stores dramatically reduces business barriers for developers

Developers Publishers Distributors TelecomEnd

Customers

App StoresEnd

CustomersDeveloper

Shorten software publish cycles

Increase profit margins

Developers

Developer

Publishers Distributors Telecom

App stores

Source: Idate, 2009/11, compiled by DIGITIMES, 2010/3

Past

Now

Past

Now

Peak download statistics thru mobile devices, 2008-2013

Unit: million times

Source: ABI Research, DIGITIMES ， 2010/4

2009~2013 mobile devices download statistics and forecast

Taiwan ”App. Store” model

App Store reduces developers’ barriers to do business

Shortens the distance between developers end customers

Mobile device downloads a booming market

Dramatic growth in the next few years

Global perception of Taiwan developers will be key to success

Worldwide 3 billion handsets market controlled by 24 big Telecom companies

Telecom services is the entrance for the App Store

Government will play a big hand in helping local Telecoms to corporate with worldwide Telecom companies

Duplicate the model in emerging markets such as China

A good example is the Quanta Computer and Chunghwa Telecom corporate project

Opportunities and challenges

Challenge from iPad-like compact mobile products rising

Implement mature technologies

Don’t bother with unnecessary software

Focus on market niche: Specific applications and type of customers

New product will still drive trends

Taiwan excels at quick response (time-to-market) to market changes

Taiwan well suited to serve as technology gateway

Worldwide component demand: Market share by region (A US$209 billion market)

2009

13.4

5.111.9

11.9

57.7

Asia

Japan

Europe

NorthAmerica

Others

Source: Gartner, WSTS,2009/5

Demand shifts to Asia marketsAnd ¾ in Greater China, with 2/3 of that

controlled by Taiwan suppliers

MID

3.5” ～ 7”

Broadcom, Qualcomm

ARM or x86 CPU

Lin OS

SSDSmartphone

< 3.5”

Broadcom, Qualcomm

MIPS,ARM CPU

Many OS,SSD

eBook

Tablet PC

7” ～ 10.2”

Broadcom, Qualcomm

ARM or x86 CPU

Lin or Win OS

SSD or HDD

Notebook

> 10.2”

x86 CPU

Win OS

HDD

Source ： DIGITIMES Research ， 2009/6

Targeting the key markets

Managing Taiwan’s changing role in shift to cloud computing

Change the model of OEM/ODM business

Convert to full-service manufacturing provider and bring about the organization change in a timely manner

Manufacturing as a service

Design as a Service

SI as a Service

IP Portfolio as a Service

Help Taiwan ICT industry become one of the first to benefit from the transition to cloud computing

Create local value in Taiwan

Build an innovative business model through a cloud computing infrastructure

Increase applications and quality to gain a wider local market and business scale

Build up local system integrators and enhance service capabilities

Cloud computing industry infrastructure

Server

Storage

IPaasMaas

Daas

Network

Source: DIGITIMES, 2010/5

SIaas

Software

Taiwan ICT Industry update

Rev. (US$ million)

2008 2009 GR(%)

ICT Manufacturing(143) 173,476 184,815 6.5

Optical (73) 47,818 38,594 -19.3

Semiconductor (150) 53,012 55,532 4.8

Components (182) 28,463 29,096 2.2

Service and S/W (82) 7,901 6,613 -16.3

Total (630) 310,672 314,650 1.2

Source ： DIGITIMES Research, 2010/3