In a recent Taiwanese government shift towards relaxing restrictions on companies investing in production on the Chinese mainland, the MAC (Taiwan’s Mainland Affairs Council) agreed to allow Taiwan national firms to buy or invest in non-Chinese based enterprises. While this seems like a minor concession on the part of the government, it has major implications for Toppoly Optoelectronics, who recently purchased the mobile display systems business unit from Royal Philips.

Steve Sechrist
Senior Analyst and Editor
of Projection Monthly &
Microdisplay Report

This deal-making policy has implications on several levels. For Toppoly, it gets them a relatively cheap source of Chinese labor for a time, and labor intensive part of their LCD assembly process. For China, it moves the LCD production expertise and technology transfer further upstream towards full “back-end” assembly. By all counts this is a logical and expected direction for the Chinese, but a milestone none-the-less. Finally, and perhaps most significant, the deal with Philips that initially didn’t look as attractive because of MAC ownership restrictions, now in retrospect is a brilliant piece of corporate/government maneuvering by Toppoly. So much so, that it makes one wonder if this policy shift wasn’t in the works well before the Philips/Toppoly deal was struck. This is reminiscent of the famous Clinton/Ted Turner buffalo deal in which several months prior to government sponsored buffalo entitlements, billionaire Turner buys one of the largest ranches in the US and populates it with—yes government subsidized buffalo.

Now here’s an interesting side-note perhaps not lost on Toppoly. Turner has grown his ranch into no less than 14 large buffalo ranches, making him the largest private land owner in the US. It all goes to show that successful deal making leading to significant competitive advantage comes at many levels, both corporate and government, and on the surface looks like genius in being at the right place at just the right time—and that’s no bull, err…, buffalo.

One other story we picked up was on the Amimon announcement of wireless transmission of uncompressed HDTV at 1.5Gb per second. Hollywood likes this approach as uncompressed streaming data is much harder to capture and replicate (distribute royalty free on the web)—given the shier volume and data rate of the stream.

Manufacturers like it because it eliminates the need to pay for expensive codec’s and royalty payments for MPEG-2, and 4 compression. Keep in mind Amimon is not giving away the technology, but if they are smart about it, everyone can save.

The company positions the solution as a step towards universal connectivity “making the wireless living room a reality”. That may be so, but there are still many unanswered questions and the product is not due to ship until mid-06. We’ll have to look for this one at CES and give an update on what we see.