On March 3, Hon Hai Precision Industry delivered its first EV, the Model T commercial bus, to a bus route operator based in Kaohsiung City in southern Taiwan. The company aims to deliver 30 buses by the end of this year to expand its EV business, which is a new entry into the market, and the key to its future growth will be the extent to which it can break away from its business model that relies on contracted production of iPhones.

The “Model T” was delivered to Kaohsiung Bus Company. The vehicle was developed by Hung Hua Advanced Technology, a new company jointly established with Yulon Motor Manufacturing (Yulon), a major Taiwanese car manufacturer. Everything about the Model T, from concept to design and manufacturing, was done in Taiwan.

More than 65% of the parts procured were supplied by members of MIH, a group of more than 1,000 cooperating manufacturers recruited by Hon Hai when it entered the EV market, as well as by Taiwanese manufacturers. The vehicle will begin operating on actual bus routes on March 16, the company said.

Hon Hai also plans to introduce EVs for personal use in the future. In addition to the Model C SUV, which will be the first EV for individuals, the company plans to introduce the Model E, a high-end sedan. The company has already announced a plan to achieve sales of 1 trillion Taiwan dollars (over 4 trillion yen) in five years.

Source: The Nikkei

PSR Analysis: Hon Hai moves very fast. Less than two years after announcing its entry into the EV business, Hon Hai delivered one of the company’s first three EV prototypes in October 2021.

The alliance they founded, MIH, has been in existence for more than a year since October 2020, and more than 2,000 companies from Japan and other countries have joined the development coalition. An alliance of unprecedented scale is about to bring about a major innovation in the automotive industry.

MIH (Mobility in Harmony) is an open EV ecosystem that promotes new collaborations in the mobility industry. MIH brings together strategic partners in the EV field, where the development and manufacturing processes are different from those of conventional vehicles, and promotes the creation of next-generation EVs, autonomous driving, and mobility service applications by opening up advanced hardware and software technologies.

Through the realization of reference designs and standardization of EV technologies, many alliance members intend to jointly create an open EV platform that will bring innovation to the industry by shortening development cycles and lowering barriers to entry.

The number of overseas companies outside of China and Taiwan participating in the MIH continues to increase. In addition to South Korea’s Kia and India’s Mahindra, Tier 1 automakers Continental of Germany and ZF are also participating.

Major players include Microsoft, Arm, LG Electronics, ON Semiconductor, Oracle, Kaspersky Lab, Samsung Electronics, Siemens, TomTom, and Dell Technologies.

At the time of MIH’s inception, the impression was that Taiwanese and Chinese companies accounted for more than 95% of its members, but now, one after another, a diverse group of members have gathered from around the world, greatly enhancing its development capabilities.

The unprecedented scale of the MIH is symbolic of the global interest in next-generation mobility, such as EVs and autonomous driving.

It is easy to imagine that this power of MIH has been a major driving force in the development of the EV buses this time around. All eyes are now focused on the future actions of this huge alliance on an unprecedented scale. PSR

Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is in early talks with the German government about potentially establishing a plant in the country, according to a senior executive.

Various factors, including government subsidies, customer demand and the talent pool, would influence its final decision, TSMC senior vice president of Europe and Asia sales Lora Ho (何麗梅) told reporters on the sidelines of a technology forum in Taipei.

The discussions come as the EU and others seek to increase domestic chip production to mitigate the risk of supply chain disruptions.

The chipmaker has not discussed incentives with Berlin or decided on a location, Ho said.

TSMC chairman Mark Liu (劉德音) in June told shareholders that the Hsinchu-based company had begun assessments on setting up manufacturing operations in the European country.

The world’s largest contract chipmaker, which mostly produces domestically, has started to diversify over the past year to help meet demand in various major countries seeking to bolster domestic semiconductor production out of national security and self-sufficiency concerns.

It is building a US$12 billion facility in Arizona and is set to soon start construction of a US$7 billion plant in Japan.

Meanwhile, the EU said it would unveil the “European Chips Act” in the first half of next year as part of its strategy to boost semiconductor production.

One of the goals would be to account for 20 percent of global production by 2030, the bloc said.

Source: Taipei Times; Bloomberg and Reuters                      Read The Article

PSR Analysis: Continuing a theme that has been developing since early 2020, supply chain frailties and sourcing shortfalls are driving plans for localized production facilities across the globe.  Semiconductors are at the center of the discussion.  The causes of the current shortage in the automotive industry, ranging from natural and man-made disasters to channel diversions and everything in between, have made it clear that local production is not only beneficial, but also essential, as new technologies continue to take root and grow in the world markets. 

Port congestion, labor shortages, power outages and political conflicts are impacting the movement of goods and materials.  Regional semiconductor production facilities like TSMC’s Europe facility being discussed will take time to build and will still face many of the same challenges which exist in current locations: raw material acquisition, skilled labor hiring, environmental certification, domestic transportation bottlenecks and water resource management. 

Despite these challenges, the benefits of a diversified supply chain for these key components will offer greater opportunity for the long-term implementation of technologies need to expand alternative energy vehicles, autonomous drive capabilities and myriad other factors which will be required for smart cities of the future.

Moreover, from the Life Cycle Assessment (LCA) perspective, the chance exists to reduce some of the carbon footprint associated with semiconductor production, and possible develop meaningful recycling plans that can be managed regionally, whether in Europe or in other areas.  PSR

Erik Martin is Director, Asia Region, for Power Systems Research

Semiconductors help power everything from your phone to your car. Here’s what to know about the major supply chain problem.

There are chips in nearly everything electric you own, from your phone to your computer to your car. There are even chips in items you wouldn’t expect, such as your washing machine, electric toothbrush, and refrigerator. But these tiny parts that power so much of our lives are now in critically short supply.

“Right now we have a global supply chain in crisis,” says Patrick Penfield, a professor of supply chain practice at Syracuse University. “We’ve just never ever seen anything of this magnitude impact us before.”

What are these chips?

These chips are the lifeblood of modern society, but even before the pandemic, demand for them exceeded supply. This year, economist Rory Green called semiconductors “the new oil,” pointing out that Taiwan and Korea control the lion’s share of chip production today.

But while these chips were an American invention, the number of US manufacturers currently creating them has declined severely. In 1990, 37% of chips were made in America, says James Lewis, senior vice president and director of CSIS’s Strategic Technologies Program. By 2020, that number was only 12%.

What is the chip shortage?

As the world shut down because of the COVID-19 pandemic, many factories closed at the same time, making the supplies needed for chip manufacturing unavailable for months. Increased demand for consumer electronics caused shifts that rippled up the supply chain.

Orders began to pile up as manufacturers struggled to create enough chips to meet the new levels of demand. A backlog began to grow and grow and grow.

Car companies, like Ford, have to predict the amount of chips they will need to produce their cars and order them in advance from one of the chip manufacturers. As of now, it can take at least half of a year for a chip order to come in, says Penfield. The current demand for chips is so great that manufacturers can’t make enough chips to meet it at this time, meaning consumers will soon be seeing higher prices for fewer goods.

But the issue wasn’t just with manufacturing. As COVID made its way through Asia, ports shut down, sometimes for months. Some 90% of the world’s electronics go through China’s Yantian port, and it was recently closed, leaving hundreds of container ships waiting to dock.

What caused the chip shortage?

Bad decisions by the auto industry also added to the shortage. When COVID started, many companies canceled their orders for chips because they assumed the economy was about to take a lengthy hit, says Lewis​​. Car companies in particular cancelled orders, so chip companies switched to making chips for consumer products, attempting to meet the explosive demand caused by the pandemic. Having retooled their plants to make chips for consumer goods instead of cars, a shortage of car chips ensued.

There aren’t many chip manufacturing plants in the world, and the few that were running during the pandemic were subject to a series of unlucky weather events that delayed the manufacturing process further.

Japan’s Renesas plant, which creates almost one-third of the chips used in cars around the world, was severely damaged by a fire, while winter storms in Texas forced some of America’s only chip plants to halt production. Producing these chips also requires a lot of water, and severe drought in Taiwan has also affected production.

Does China play a role?

While geopolitical concerns are not the main cause of this chip shortage, one ongoing concern is Taiwan’s tense relationship with China. Taiwan is the world’s leading chip producer, and the theoretical possibility of war between China and Taiwan puts American access to the chip industry in potential jeopardy and could be catastrophic for many industries that would be unable to get the chips they rely on.

“China is deeply tempted to just seize Taiwan,” says Lewis. “The Chinese are desperate to have their own chip industry. It’s become a focal point for the competition between the US and China.”

American chip manufacturer Intel has announced plans to scale up their chip production, while ​​Taiwan Semiconductor Manufacturing Co and Samsung eye locations for the American factories they plan to build. But while these plans are promising, it will take years before these factories can ramp up their production levels.

What are the effects of the shortage?

The auto industry is getting hit hard, with estimates saying US manufacturers will make at least 1.5 to 5 million fewer cars this year. Ford and General Motors have already limited production. Tesla revised its own software to support alternative chips to maintain its production levels.

When will the issue be resolved?

Opinions on when the shortage will end vary. The CEO of chipmaker STMicro estimated that the shortage will end by early 2023. The CEO of automaker Stellantis said that the shortage “is going to drag into ’22, easy.” Intel CEO Patrick Gelsinger said the shortage could last two more years.

“We’ve probably got about nine, 10 months of this to live through,” says Lewis. “If you can afford to wait, prices will go down.”

Source: Popular Science (By Shira Feder)                  Read The Article

PSR Analysis: PSR has devoted considerable time the past 12 months to examining the fragility of the global supply chain.  We have addressed the topic in webinars, podcasts, and PowerTALK articles as well as in the quarterly Update Bulletins we send to our data license subscribers. 

A central topic in the supply chain issue is the severe shortage of semiconductors.  In this article, Shira Feder has provided an excellent overview of the issues facing the automotive industry, as well as all industries which now depend on microchips to function.  Citing a combination of lagging demand due to COVID, misfortune, sheer bad luck, poor planning, geopolitical factors and disasters – both man-made and natural, this article reenforces the need to diversify supply chains. 

As fleet electrification expands and autonomous drive technologies progress, the demand for microchips will intensify.  Two geographically small countries which punch well above their weight class – Taiwan and South Korea – will continue to be key players moving forward.  The US has done well to engage both in working to find solutions, but these will take time to realize.  All the more reason for governments to examine what they need to do to either develop manufacturing at home or develop and maintain close relationships with stable and reliable partners. PSR

Erik Martin is Director – Asia Region, for Power Systems Research

TAIPEI–The acquisition of a 60.5% stake in ENGIE EPS by Taiwan Cement Corporation (TCC) was finalized and completed in July.

The deal, which was announced in April, saw the Italy-headquartered stationary storage and e-mobility solutions subsidiary of French multinational Engie taken over by TCC subsidiary Taiwan Cement Europe Holdings.

What both parties get out of the deal

In a press release, TCC said it has now become a “major player” in electric vehicle charging infrastructure as well as its newly acquired capabilities in building large-scale battery storage systems and microgrids.

To date, ENGIE EPS / NHOA has completed 300MWh of energy storage installations and has 600MWh of projects under construction, including a solar-plus-storage project in Hawaii that combines 60MWac of solar PV with 240MWh of battery storage.

Through a partnership with Free2Move, a subsidiary of automotive OEM company Stellantis, it is also deploying EV charge networks that include bi-directional vehicle-to-grid (V2G) systems. Through the latter offering, the company is currently installing a 25MW V2G project in Turin, Italy, which will provide a new “ultra-rapid frequency reserve” service to Italian grid operator Terna called Fast Reserve.

TCC already owns a lithium-ion battery manufacturer based in Taiwan, called E-Moli, which has 1.5GW of annual production capacity. Through this new deal it is now the sole group based in Taiwan to have in-house R&D, manufacturing and management capabilities across the value chain for clean energy and electric mobility, it claimed. The company touted NHOA’s strengths in digital software solutions, including an artificial intelligence-driven energy management system (EMS) and cloud-based monitoring platform.

TCC said immediate opportunities ahead include installing large-scale energy storage systems for Taiwan’s various big industrial players. The battery systems could reduce these entities’ peak demand use of electricity from the grid and provide backup power as needed.

Source: Energy Storage News (by Andy Colthorpe, Editor)   Read The Article

PSR Analysis: The vision shown by TCC in expanding beyond its traditional business model into the realm of global alternative energy solutions will position the firm to be an important player in the development of smart cities in Taiwan and other regions.  The key here is that TCC has a cohesive vision for bringing together seemingly disparate elements. 

Variable renewables – often hindered by inconsistent supply – once had to rely on diesel or gas backup systems.  Battery Energy Storage Systems (ESS) can free the VRE source from dependence on fossil fuel generators, and support utilities by increasing the availability of VRE supplied electricity. 

EV charging infrastructures are one of the major hurdles for any city, province or country trying to increase EV adoption and reduce consumer anxiety.  By adding Vehicle to Grid/Business/Home (V2X) infrastructure to the equation, EVs that would normally sit dormant during the day in parking lots can be employed, as needed, to provide supplemental energy throughout the day or night. 

Certainly, none of these on its own, or even taken as a whole, constitutes a panacea.  There are serious challenges when it comes to battery technology and the well-to-wheel impact.  Experts I’ve talked to remind us that a full Life Cycle Assessment (LCA), which calls for comprehensive CO2 emissions control during energy generation, manufacturing, transportation, and recycling must be included in future regulations.  Without considering the whole picture, we are certain to miss the mark.  PSR

Erik Martin is Director – Asia Region for Power Systems Research

TAIPEI. As electric vehicle (EV) development becomes a global effort, batteries that play a vital role to EVs’ cost-performance ratios are a focus to manufacturers with ambitions to expand in the EV market…

Taiwan’s battery industry may not be backed by well-known brands and abundant natural resources. Nevertheless, a large part of Taiwan-based battery suppliers have been assembling battery modules for Taiwan’s ICT industry. For example, Simplo, Dynapack and Celxpert with a long-term focus on manufacturing battery modules for consumer electronics such as notebook only started to set foot in EV battery solutions in recent years…

Batteries for future EV applications are expected to feature higher energy density, faster charging and discharging time, lighter weight and friendlier costs. Whether lithium-ion batteries and LFP batteries can maintain their leading positions at the moment in the EV market still remains to be seen…

Most manufacturers have high hopes for solid-state batteries to replace lithium-ion batteries. Solid-state batteries use solid electrolyte instead of liquid one to significantly reduce the risks of short circuits and accidents. By packing higher-power anode and cathode, solid-state batteries also enable higher energy density, allowing them to outperform ternary lithium-ion batteries in terms of charging time, working temperature and cell longevity.

In view of the multiple benefits of solid-state batteries, Toyota, Volkswagen, Nissan and GM are all engaging in the development of solid-state batteries. Foxconn, the initiator of the MIH Open Platform Alliance, reiterated its plans to introduce demo solid-state battery products by year-end 2021 and launch commercialized solid-state batteries by 2024…

It will be difficult to catch up with or compete against international manufacturers that have long been devoted to lithium-ion battery development if Taiwan only now starts to build its own patent portfolio from scratch. Taiwan should also seek joint development opportunities from international manufacturers. By leveraging Taiwan’s accumulated experience and technological strength in the ICT sector to help expand the applications for solid-state batteries, Taiwan-based battery suppliers still have a shot at establishing market presence.

Source: DIGITIMES (by Ninelu Tu)                  Read The Article

PSR Analysis: Taiwan is forging an important path forward in the development of EV batteries by exploring technologies that can compete with the lithium-ion batteries currently on the market.  Companies with prior experience manufacturing cells for hi-tech communications companies are finding opportunities in the EV sphere, and are using a combination of experience,  technical expertise, and ingenuity to catch up relatively quickly. 

A key aspect of this advancement is the focus on solid-state batteries.  The potential for solid-state batteries to outperform lithium-ion batteries in terms of energy density, longevity, charge time, cost and safety makes this juice worth the squeeze.  Cooperative efforts now underway further improve the chances for success on both technologically and financially. 

Foxconn’s MIH Open Platform will engage hundreds of companies in the expansion of EV production.  But it is their work on solid-state batteries, as well as that being carried out by Pro-Logium and other Taiwanese companies that may bring us into a new era that has the greatest impact on adoption of EVs far beyond Taiwan’s borders. PSR

Erik Martin is Director–Asia Region for Power Systems Research