Quotes of the Day
Thirty years ago, computer manufacturing was an arcane business involving a handful of companies building a small number of large and expensive machines a year, mostly using components made in-house. Stan Shih, a mild-mannered Taiwanese electrical engineer working on gadgets such as desktop calculators, saw a better way. Among the first to recognize the potential of microprocessors (those tiny computer chips that today are the brains of billions of products from cars to cell phones), Shih saw how marrying cheap chips with efficient manufacturing could spread computing power to the masses. It was the right idea — so right that Shih ended up creating a globally recognized brand of personal computers (Acer), kindling a booming high-tech industry in Taiwan (where many of the components in the world's electronic devices are now made), and inspiring a generation of Taiwanese entrepreneurs.
At Acer, Shih took a radically different approach to PC making. By focusing on supply-chain optimization and cultivating a vibrant ecosystem of tightly clustered component suppliers, Acer was able to introduce new technology faster and at lower prices than competitors. As early as 1986, for example, then-little-known Acer released the world's second PC based on Intel's 386 microprocessor, just one month after industry giant Compaq.
Thanks in no small part to Shih's pioneering example, the integrated-supply-chain model is now the hallmark of PC contract manufacturing worldwide. In other words, he's a big reason why your PC costs $1,000, not $10,000. Under his stewardship, Acer grew into a top-five PC brand. But Shih's innovations didn't stop there. Rather than competing head-on with low-cost Chinese manufacturers, he gradually moved Acer up the value chain to focus more on design and innovation. Acer — which once did contract manufacturing for the likes of IBM, Dell and Compaq — is now itself the customer to mainland contract manufacturers that have emulated Acer's earlier business model. Instead of merely manufacturing cheap capacitors, radios and the like, Taiwan's PC industry grew far more ambitious under Shih's mentorship. With ever more countries entering the global information economy, his legacy of innovation-driven business will continue to power economic growth and inspire the next generation of Asian entrepreneurs.
- Paul S. Otellini
- The engineer who turned Taiwan into a PC-manufacturing powerhouse