Strategic positioning of Taiwan in the outsourcing market: Evidence from information technology services and electronic manufacturing outsourcing to China

In outsourcing relationships with China, the Electronic Manufacturing (EM) and Information Technology Services (ITS) industry in Taiwan may possess such advantages as the continuing growth of its production value, complete manufacturing supply chain, low production cost and a large-scale Chinese market, and language and culture similarity compared to outsourcing to other countries. Nevertheless, the Council for Economic Planning and Development of Executive Yuan (CEPD) found that Taiwan's IT services outsourcing to China is subject to certain constraints and might not be as successful as the EM outsourcing (Aggarwal, 2003; CEPD, 2004a; CIER, 2003; Einhorn and Kriplani, 2003; Kumar and Zhu, 2006; Li and Gao, 2003; MIC, 2006). Some studies examined this issue, but failed to (1) provide statistical evidence about lower prevalence rates of IT services outsourcing, and (2) clearly explain the lower prevalence rates of IT services outsourcing by identifying similarities and differences between both types of outsourcing contexts. This research seeks to fill that gap and possibly provide potential strategic guidelines to ITS firms in Taiwan. This study adopts Transaction Cost Economics (TCE) as the theoretical basis. The basic premise is that different types of outsourcing activities may incur differing transaction costs and realize varying degrees of outsourcing success due to differential attributes of the transactions in the outsourcing process. Using primary data gathered from questionnaire surveys of ninety two firms, the results from exploratory analysis and binary logistic regression indicated that (1) when outsourcing to China, Taiwanese firms' ITS outsourcing tends to have higher level of asset specificity, uncertainty and technical skills relative to EM outsourcing, and these features indirectly reduce firms' outsourcing prevalence rates via their direct positive impacts on transaction costs; (2) Taiwanese firms' ITS outsourcing tends to have lower level of transaction structurability relative to EM outsourcing, and this feature indirectly increases firms' outsourcing prevalence rates via its direct negative impacts on transaction costs; (3) frequency does influence firms' transaction costs in ITS outsourcing positively, but does not bring impacts into their outsourcing prevalence rates, (4) relatedness does influence firms' transaction costs positively and prevalence rates negatively in ITS outsourcing, but its impacts on the prevalence rates are not caused by the mediation effects of transaction costs, and (5) firm size of outsourcing provider does not affect firms' transaction costs, but does affect their outsourcing prevalence rates in ITS outsourcing directly and positively. Using primary data gathered from face-to-face interviews of executives from seven firms, the results from inductive analysis indicated that (1) IT services outsourcing has lower prevalence rates than EM outsourcing, and (2) this result is mainly attributed to Taiwan's core competence in manufacturing and management and higher overall transaction costs of IT services outsourcing. Specifically, there is not much difference between both types of outsourcing context in the transaction characteristics of reputation and most aspects of overall comparison. Although there are some differences in the feature of firm size of the outsourcing provider, the difference doesn't cause apparent impacts on firms' overall transaction costs. The medium or above medium difference in the transaction characteristics of asset specificity, uncertainty, frequency, technical skills, transaction structurability, and relatedness has caused higher overall transaction costs for IT services outsourcing. This higher cost might cause lower prevalence rates for ITS outsourcing relative to EM outsourcing. Overall, the interview results are consistent with the statistical analyses and provide support to my expectation that in outsourcing to China, Taiwan's electronic manufacturing firms do have lower prevalence rates of IT services outsourcing relative to EM outsourcing due to higher transaction costs caused by certain attributes. To solve this problem, firms' management should aim at identifying alternative strategies and strive to reduce their overall transaction costs of IT services outsourcing by initiating appropriate strategies which fit their environment and needs.

New fuel cells system for portable application with low temperature cofired ceramic (LTCC) technology

Miniature direct methanol fuel cells (DMFCs) are promising micro power sources for portable appliction. Low temperature cofired ceramic (LTCC), a competitive technology for current MEMS based fabrication, provides cost-effective mass manufacturing route for miniature DMFCs. Porous silver tape is adapted as electrodes to replace the traditional porous carbon electrodes due to its compatibility to LTCC processing and other electrochemical advantages. Electrochemical evaluation of silver under DMFCs operating conditions demonstrated that silver is a good electrode for DMFCs because of its reasonable corrosion resistance, low passivating current, and enhanced catalytic effect. Two catalyst loading methods (cofiring and postfiring) of the platinum and ruthenium catalysts are evaluated for LTCC based processing. The electrochemical analysis exhibits that the cofired path out-performs the postfiring path both at the anode and cathode. The reason is the formation of high surface area precipitated whiskers. Self-constraint sintering is utilized to overcome the difficulties of the large difference of coefficient of thermal expansion (CTE) between silver and LTCC (Dupont 951) tape during cofiring. The graphite sheet employed as a cavity fugitive insert guarantees cavity dimension conservation. Finally, performance of the membrane electrode assembly (MEA) with the porous silver electrode in the regular graphite electrode based cell and the integrated cofired cell is measured under passive fuel feeding condition. The MEA of the regular cell performs better as the electrode porosity and temperature increased. The power density of 10 mWcm-2 was obtained at ambient conditions with 1M methanol and it increased to 16 mWcm -2 at 50°C from an open circuit voltage of 0.58V. For the integrated prototype cell, the best performance, which depends on the balance methanol crossover and mass transfer at different temperatures and methanol concentrations, reaches 1.13 mWcm-2 at 2M methanol solution at ambient pressure. The porous media pore structure increases the methanol crossover resistance. As temperature increased to 60°C, the device increases to 2.14 mWcm-2.