Editor/ Samuel Lin from Meet 創業小聚
We are presently witnessing a meteoric rise in the global 5G AIoT industry. Whether it's the development of smart cities, the realization of smart manufacturing processes, or the application of these technologies in fields such as healthcare, agriculture, energy, and environmental sustainability, we are continually exploring new horizons. Yet, in this moment where opportunities and challenges intersect, we eagerly anticipate the emergence of innovative applications that have the potential to maximize the well-being of individuals.
The combination of 5G, AI, and IoT is not merely a technological synergy but a gateway to a future where connectivity, intelligence, and automation will redefine how we interact with the world around us. This convergence is driving a wave of digital transformation that transcends borders and industries.
Our recent salon event featured distinguished speakers including KJ Chou, an independent director at BenQ Materials, Kris Peng, the General Manager of UMC Capital, Cody Lee, the Chairman of Hongcheng Capital Co, and Lee Hong Wei, the CEO of Top Crest Capital Sdn Bhd. These thought leaders not only shared valuable insights into the current state and future trends of the global and Taiwanese 5G AIoT industries but also shed light on Taiwan's competitive advantages in this burgeoning field. Additionally, they provided invaluable advice to aspiring startups looking to venture into the international 5G AIoT market.
Since the official commercialization of 5G in 2020, both private enterprises and governmental bodies in Taiwan have rallied their support and resources behind this transformative technology. Their aim is twofold: to secure a competitive advantage as early adopters and to harness the potential of 5G in creating smarter, more convenient living environments and manufacturing processes. However, when we look at the global stage, what advantages does Taiwan bring to the table in this domain? Cody Lee, Chairman of Plus Capital, highlighted that Taiwan is fertile ground for the development of 5G AIoT-related industries. Taiwan boasts a dual advantage in technology and manufacturing, particularly in sectors like semiconductors, communications, and electronics, where it holds a prominent global position. These strengths significantly bolster the development of 5G AIoT-related industries. Furthermore, the recent impact of the U.S.-China trade tensions has inadvertently benefited Taiwan. Not only does Taiwan possess specialized technical expertise, but it also has the capacity to provide cost-effective products and services tailored to market demands. This positions Taiwan as a key player in the supply chains of this industry. In essence, Taiwan is already "Ready for 5G AIoT."
Currently, global leaders in the 5G AIoT industry include major players like AMD, Nvidia, Microsoft, Google, and AWS. They play a role akin to architects, excelling in the design of the infrastructure for 5G and cloud applications while providing specialized guidance to governments and businesses worldwide. Taiwan, on the other hand, excels in manufacturing the high-value hardware equipment required for this infrastructure. Therefore, Taiwan remains a crucial player in the global supply chain.
However, platform-based companies like Nvidia, Microsoft, Google, and AWS primarily focus on the development of AI models and platforms, with relatively less emphasis on AI applications. In contrast, Taiwan has demonstrated exceptional prowess in AI application development. For example, Advantech, a manufacturer of industrial computers, has collaborated with software companies to innovate AI applications.
At present, AI applications primarily fall into two major categories: Vision AI and Data AI. Products and services like Vision Pro and Copilot are driving the development of smart city-related products and services. While our previous perceptions of smart cities might have remained in the realm of imagination, the advent of these products and services demonstrates that our previous visions are attainable. Taiwan, with its diverse landscapes and settings, provides numerous opportunities for field testing. For instance, Taipei's Neihu District is ideal for piloting smart transportation initiatives. In the past, commuters faced hour-long journeys to cover just 2 kilometers due to traffic congestion. Startups have implemented Vision AI at every intersection to analyze traffic flow and conditions, subsequently enhancing traffic signal operations. In essence, numerous pain points and demands in our daily lives are waiting to be explored and addressed. With a firm grasp of these pain points and demands, innovative applications that closely align with everyday life can be developed. Furthermore, in the next 3-4 years, Taiwan will witness the emergence of an increasing number of AI and 5G-related companies. This will culminate in the formation of an industry cluster and supply chain. Additionally, the future of the Internet of Vehicles (IoV) will be one of the most significant applications of 5G AIoT. Drawing from its extensive experience in the automotive industry, Taiwan is poised to claim a significant stake in IoV development.
The global 5G AIoT market is experiencing explosive growth. From 2020 to 2026, the global 5G IoT market is expected to grow from $9.9 billion to $402 billion, with the Asia-Pacific region exhibiting the fastest growth. While competition in the international market may intensify in the future, it's important for startups to recognize that the 5G AIoT market is characterized by diffusion rather than concentration. This trend signifies that the market still holds significant growth potential. For startups aspiring to develop innovative 5G AIoT applications, this represents a highly opportunistic and dynamic landscape. However, in addition to understanding market trends, startups should possess imagination to foster innovation in their products and services, ensuring their relevance and resilience in the market.
Another critical factor in the development of the 5G AIoT industry is cloud services. Many major cloud service providers, including Microsoft, Google, and AWS, have already established Data Centers in Southeast Asia, such as Malaysia and Singapore. This is not only due to the ample incentives and resources provided by local governments, including favorable terms for utilities and tax benefits but also due to the substantial market demand and strategic geographical positioning in Southeast Asia. For example, since 2021, Malaysia has attracted over $80 billion in investments dedicated to the construction, operation, and related industries of Data Centers. Singapore has also completed its latest Data Center construction this year. Looking ahead to 2030, global investments in Data Centers are projected to continue growing at a double-digit rate. This underscores Southeast Asia's emergence as a pivotal hub for the development of the 5G AIoT industry. Therefore, for enterprises and startups looking to expand into the international 5G AIoT market, the Southeast Asian market is also one of the markets to watch and invest resources in the future.
In conclusion, the convergence of 5G, AI, and IoT is propelling us into an era of limitless possibilities. Taiwan, with its technological prowess, manufacturing excellence, and innovative spirit, stands poised to play a central role in shaping the 5G AIoT landscape. As the global 5G AIoT market continues its explosive growth, startups and established companies alike have the opportunity to pioneer new applications, address pressing societal needs, and contribute to the transformative potential of this dynamic industry. With a firm understanding of market trends, a commitment to innovation, and a global perspective, Taiwan is indeed "Ready for 5G AIoT" and well-positioned to lead the charge in this transformative journey.
For startups aiming to venture into the 5G AIoT industry, the panelists stressed the importance of truly understanding market trends and identifying user needs and pain points. They encouraged startups to consider whether their products and services could be scaled up and, once scaled, continuously iterate and update to enhance their offerings.
From a venture capital perspective, there's a strong expectation that startup teams should cultivate a platform-based mindset. Platform-based thinking entails ensuring that the products and services provided by startups can be applied across multiple domains, rather than being confined to a single area. This approach is instrumental in fostering the development and growth of startups in the ever-evolving landscape of the 5G AIoT industry.
Moreover, adopting a platform-based approach not only enhances a startup's chances of securing funding from venture capitalists but also increases the likelihood of attracting partnerships and collaborations with large enterprises. This strategic shift towards platform thinking can open up new opportunities for startups and position them for success in the dynamic world of 5G AIoT.
As these technologies continue to evolve, we find ourselves at a crossroads of immense potential. The convergence of 5G, AI, and IoT has the power to reshape industries, enhance our quality of life, and address some of the most pressing global challenges.
However, in this era of intertwined opportunities and challenges, it's crucial to remain forward-looking and adaptable. We must embrace the spirit of innovation and exploration, continually pushing the boundaries of what's possible. By doing so, we can harness the full potential of 5G AIoT to create a better future for all.
Reference:
Samuel Lin, 2023/09/07, <Embracing the new era of 5G AIoT industries- Taiwan is a fertile land for the development of 5G AIoT> , Meet , News