What’s Behind This Taiwan Electronics Billionaire’s Interest In The Auto Business

Taiwan’s Yageo has made a name for itself in the electronics business over the years by providing electronics components to IT device suppliers like Apple and Flextronics. Chairman Pierre Chen has become one of the world’s wealthiest tech entrepreneurs with a fortune worth $3.4 billion on the Forbes Real-Time Billionaires List today. Its Taipei-traded shares have gained 50% in the past year.

Yet of late, Chen is looking at the auto industry, too. This year, Yageo completed the $1.8 billion acquisition of electronics components maker Kemet of the U.S., which counts automakers among its customers. And last month, Yageo also invested another $10 million in Los Angeles-headquartered EV start-up Canoo. EV vehicles in general have been getting more attention than ever following big stock gains by Tesla and highly valued China IPOs such as Li Auto and Xpeng.

What’s behind Yageo’s moves into the auto field? I spoke with Chen in Taipei on Sunday. Excerpts follow.

Q. Why are you upbeat about EV sales?

A. EV is for sure is going to change the older car and automotive industry – both EV and autonomous vehicles. It’s not the industry standard yet but you can see so many new ideas; we know this is the market trend for the automotive industry. Tesla is this the first big success so far, but there will be many different models.

I don’t want EV to become a mature or successful business model before Yageo responds. We need to be proactive, get into the industry firsthand, and understand the models and requirements. I’m not an EV player, but I’m an important component supplier and solution.

Q. EV prices are still a lot higher for consumers than traditional models.

A. Yes, but there will be a market for cars that save energy or can provide more space and have a different riding experience, compared with when you drive yourself. You’ll enjoy the ride, enjoy the experience, have safety and save energy. This is the future.

Q. Kemet’s auto industry ties were an attraction for you?

A. You can see Yageo is trying to aim for the automotive industry. We’ll continue with products like we (support) today such as GPS, radios and CD players； EV and autonomous vehicles are on another level. General Motors, Chrysler, Toyota, Honda, Nissan, and BMW Porsche are involved. This will also involve the whole engine system and more electronics components.

Q. How did you meet Canoo? How did that investment happen?

A. We heard about them a few years ago. We invested $10 million to have opportunity to get into the understanding the designs and the applications. They are further along in launching new vehicles than some others – perhaps in 2022.

Q. Will you invest in other EV companies?

A. We’re not going to (become involved) too much we’re going to try to understand which solution is the best solution, and then allocate resources so we are about two years in advance of others. Then, we can put more resources in the right direction， and supply customers from different plants globally.

See related posts:

Xpeng Soars Upon Listing

Kemet Rises After Sale To Apple Supplier Yageo Approved

@rflannerychina