Under threat from China, Taiwan’s companies pivot to defense manufacturing : NPR

Po Sheng Lai, the founder of Shern Yeong Precise Optical, a company in the northern Taiwanese city of Yilan that makes high-end glass is pivoting to making defense products.

Emily Feng/NPR

hide caption

toggle caption

Emily Feng/NPR

Po Sheng Lai, the founder of Shern Yeong Precise Optical, a company in the northern Taiwanese city of Yilan that makes high-end glass is pivoting to making defense products.

Emily Feng/NPR

TAINAN, Taiwan — The technology behind the plastic injection mold machines that hum in a factory in this town in southern Taiwan were once used to make Buddhist temple decorations. A generation later, the company, Hwa Meei Optical, now makes recreational eyewear, such as ski goggles and sunglasses.

But it has ambitions to outfit soldiers.

“Every generation at Hwa Meei improves. Now we will have to see what the third generation will do,” says Lin Shunfu, a company vice president.

He is now shifting the company into the defense sector to manufacture and sell shatterproof, bullet-resistant eyewear for the military.

As China’s military might grows, the Asia Pacific region is in an arms race to both deter and prepare for war. Taiwan is no exception. It’s a self-governing island that China claims as its own territory, to be conquered by force if necessary. Taiwan has extended its mandatory military conscription period for men from four months to a year and is intensifying its own military drills. In July, the White House announced it would send Taiwan $345 million worth of weapons, taken directly from the U.S.’ own stockpile for the first time, as well as other defense services, such as training.

Now Taiwanese private companies are also pivoting into the defense sector and making weapons, and U.S. defense contractors are exploring ways to manufacture and design noncore components of their weapons systems in Taiwan.

To do so, they will need to work within the Taiwanese military’s rigid approach to reform and a historical preference to rely on government research institutes for equipment upgrades.

However, under pressure to match China’s accelerating military capacity, Taiwan’s military is looking for creative ways to boost its defense abilities in a short period of time, and it has been loosening once-strict procurement rules to allow private companies to develop dual-use technologies for its military — giving companies like Hwa Meei a chance.

“Every year Taiwan spends billions of dollars to buy American defense equipment. It is almost [like] we are paying the U.S. protection money. But if U.S. companies could support local businesses, some of the benefit would return to Taiwan and ensure we help each other,” Lin says.

3,000 drones by next year

Twice in the past year, China’s military has conducted military exercises simulating a full blockade of Taiwan. In a real conflict, such a blockade would make it impossible for the U.S., Japan or nearby countries to ship in any weapons or reinforcements not already stockpiled on the island.

That has led Taiwan’s manufacturers to ask: Why not build up defense supply chains

Read More

The World’s Largest Technology Companies In 2023: A New Leader Emerges

Though overall profits have started to decline, revenue growth—and the promise of artificial intelligence—are boosting tech companies’ market value.

Despite lingering economic headwinds, higher interest rates threatening profits and widespread layoffs across the industry, technology companies have been largely resilient over the past year—continuing to post record sales and recouping vast stock losses as artificial intelligence promises to reinvigorate the battered sector.

The number of technology companies landing on the Global 2000, Forbes’ annual ranking of the world’s largest companies (based on revenue, profits, assets and stock market value), ticked up to 169 this year from 164 in 2022. That’s still fewer than the record 177 spots they nabbed in 2021, thanks to their relative outperformance during the pandemic. But the tech companies on our list nevertheless posted a record $4.2 trillion in combined annual revenue over the last 12 months, up from about $4 trillion the year before and $3.3 trillion two years before.

Amid the economic uncertainty, however, new leadership has emerged. Breaking Apple’s seven-year reign atop the tech rankings, Alphabet emerges as the world’s largest technology company after rising four spots to No. 7 in the global list. The Google parent’s stock is still about 15% below peak levels in 2021, but its unshakeable search division (still its largest revenue-driver by far) and momentum in cloud services helped last year’s tech runner up post record sales of $282.8 billion.

Next up, Microsoft lands at the No. 2 spot for tech after a three-spot ascent in the global rankings to No. 9 overall. Shares of the storied tech giant have surged 40% this year and are just 2% away from record levels thanks in no small part to buzz around AI. Analysts have lauded the firm’s $13 billion investment in chatbot creator OpenAI this year as a watershed moment in the global AI arms race, and CEO Satya Nadella has asserted the technology will “change every software category, starting with the largest of all—search.”

As for last year’s leader, Apple now comes in as the world’s third-largest technology firm. Though it remained the most valuable company in the world with a market capitalization of more than $2.6 trillion, the iPhone maker slipped three spots to land at No. 10 in the overall rankings while competitors gained an edge on sales and assets. With more consumers cutting back on big-ticket spending, the firm posted its second-consecutive quarter of revenue declines last month. That took it down one peg in the overall sales rankings, but doesn’t explain most of Apple’s slippage on the list. Rather, its assets have fallen about 13% to $332 billion (moving its ranking for assets down from 107 to 127) as the firm offloaded some of its receivables—a common move as companies cut risky balance sheet items and gear up for potential recession.

Rounding out the top five, Samsung Electronics is steady at No. 14 globally, and Meta Platforms climbs one spot after its stock surged 20% over the past year. Shares

Read More