Topic of Study [For H2 History Students]:
Paper 1: Understanding the Global Economy (1945-2000)
Section B: Essay Writing
Theme II Chapter 3: Rise of Asian Tigers from 1970s to 1990s [South Korea and Taiwan]
The Origins: MultiTech
In 1976, Stan Shih (施振榮) founded MultiTech with six others, including his wife Carolyn Yeh (葉紫華). The company began its journey as an Original Equipment Manufacturer (OEM) by producing video games and distributing electronic imports. In the 1980s, MultiTech expanded its production by involving Amex as its first international distributor.
Multitech… it’s not just another new computer company. It is a leading manufacturer in the computer age, and its Taiwan manufacturing facility is the largest for personal computers. Since 1976, Multitech has been a pioneer in microcomputer technology. Today its products are sold in more than 40 countries. Earning a world-wide reputation for consistent high-quality, Multitech products have captured the loyalty of large OEMs, VARs and distrubtors.An excerpt from “Multitech – the computer family that carries many famous names” by PC Mag, 13 May 1986.
The Rising Star: Acer
In 1987, MultiTech was renamed to Acer, signifying its entry as a key player in the Personal Computer (PC) industry. Shih capitalised on the low labour costs in Taiwan to accelerate export production. By 1991, more than two-thirds of Acer’s sales were accrued from foreign markets. Although Acer sought to position itself as a full-line PC supplier, about a third of its sales was still derived from OEM in the mid-1990s.
In addition, Acer had the support from the Taiwan government to engage in a joint-project with Texas Instruments (TI) to produce semiconductors in the famed Hsinchu Science Park. Joint ventures proved advantageous as Acer acquired technology to broaden its scope of production and improve quality.
Because technological capabilities were seen as necessary core competence and proximity to sophisticated customers was important to building these capabilities, Acer invested abroad to be near these customers. Initially, Acer penetrated OECD markets in Europe and North America. By 1993, Acer had moved from assembling PCs in Taiwan and Malaysia and shipping to European and US customers to assembling abroad with strict quality standards.
… By 1995, Acer, with a market value of US$2 billion, began to split itself into 21 public companies, listed on stock exchanges around the world, to open the company to foreign investment.An excerpt from “Multinationals and East Asian Integration” by Wendy Dobson & Chia Siow Yue.
What can we learn from this article?
Consider the following question:
– Assess the importance of government intervention in shaping the rise of Acer.
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