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Delta Electronics

Open R&D Brings Brains Together


With more than 100 cooperative projects underway, Delta Electronics thrives on its wide-ranging “open R&D,” the outgrowth of a passion for both technology and knowledge…

Open R&D Brings Brains Together

By Ching-Hsuan Huang
From CommonWealth Magazine (vol. 383 )

Year: 2000 Location: MIT's Primary Computer Science and Artificial Intelligence Laboratory Event: Delta Electronics chairman Bruce Cheng speaks excitedly, albeit apprehensively, to a flat screen computer monitor.

'I have to return to Taiwan tomorrow. What flights are there'? Cheng asks the computer screen. 'Do you want a flight in the morning, noon, afternoon or evening'? the computer asks Cheng.

'I'm now at MIT, so I want a flight I can still make if I leave here sometime after 5 p.m.,' Cheng responds. Within seconds the machine is busily printing out a list of flights and even voicing a reminder: 'The timing of the first flight will be tight. If traffic is heavy you might want to take the next one.'

Cheng's astonishment doesn't prevent him from checking under the table to make sure no one is secretly operating the computer there, because 'even if it had been a person, the answer wouldn't have been so comprehensive.'

Cheng then asks the computer how the weather is in Taiwan.

The Leap from Hardware to Software

During Delta's 2000-2005 involvement in the Living Oxygen Project, which sought to develop a computer system that was as natural to the user as 'breathing air,' Cheng was most pleasantly surprised by the project's research into voice recognition systems.

The Living Oxygen Project brought together two-thirds of the professors at MIT's biggest computer science and artificial intelligence laboratory with six major global enterprises ?V including Nokia, Philips, Hewlett Packard, Japan's NTT and Taiwan's Delta and Acer.

Through its partnership with MIT, Delta has made the leap from hardware into the area of software services, moving into a completely new area from Delta's traditional technological and market niches.

Delta is currently continuing development to raise the accuracy of voice recognition systems to 99.99 percent so that credit card companies demanding a higher level of precision may be able to use future applications.

From MIT, we now fly 600 miles south to Virginia Polytechnic Institute, site of the Center for Power Electronics Systems; the largest electrical and electronic systems research facility in the U.S. The engineering research center is funded through the National Science Foundation and supported by five U.S. universities and nearly 100 multinational enterprises.

Delta's capability of producing light, compact power-supply devices widely used by the U.S. Air Force and NASA and throughout the aerospace industry was the result of cooperative development with this center in commercializing applications of cutting-edge technology.

In fact, in addition to MIT and Virginia Tech, Delta has partnered in technological research and development with the University of California, Berkeley and Case Western University, as well as such Taiwanese institutions as National Taiwan University, Tsinghua University, Chengkung University and National Central University.

A Profusion of Cooperation

In the current phase, Delta has more than 100 projects with global research organizations underway. Many of these are cooperative arrangements under the purview of the company's various business groups, while others are handled by Delta's R&D center, working with 15 domestic and overseas universities, largely focused on the hottest technological areas such as third-generation solar power, medical electronics and fuel cells.

Delta, whose consolidated operating revenue last year exceeded NT$100 billion, does not rely on acquisitions for growth, instead growing organically, with a composite average annual growth rate of as high as 40 percent over the past 36 years. Additionally, in recent years the group has rapidly expanded into new territories. For example, it entered the solar power sector by jointly founding DelSolar Co., Ltd. with the Industrial Technology Research Institute of Taiwan ?V another result of Delta's active quest for outside R&D partners.

Open cooperation is Delta's business model. It's all the result of Cheng's passion for both technology and knowledge.

As early as 20-some years ago, Cheng was already pondering some big questions: 'If we take a closed-door approach and rely strictly on our own in-house engineers, how will our products achieve international standards? How will they meet market demands'?

After mulling it over, Cheng decided to open the ordinarily closed doors of the company's research and development efforts, and began a tour of major U.S. universities. It was through this tour that he came to know Dr. Fred C. Lee, founder and director of the Virginia Power Electronics Center (VPEC) , now the Center for Power Electronic Systems (CPES), thus beginning a partnership that has lasted nearly 20 years.

Delta's cooperative model is to maintain extremely close interactive relationships with a variety of research institutions to ensure as much as possible that no gaps exist in their pursuit of potentially significant technological research.

Its long-term associations with MIT and CPES are two of the more prominent examples.

And after nearly 20 years of such a cooperative relationship with CPES, Delta now ranks as a principal member of the CPES industrial consortium. This status allows the company to transfer the many new technologies developed at CPES to its own R&D department for further development, and also gives it free access to all CPES intellectual property.

'A lot of consortium members are actually not very active. Their engineers will come and take a look at your technology, try out your technology, but in actually taking resources, including human resources, and joining you in joint technological development to the extent of cooperating on the development of commercial products from unproven technologies, Delta's commitment is the strongest, stronger even than U.S. companies,' says Dr. Fred Lee.

Delta's commitment is the strongest because early on, in 1988, Cheng decided immediately after visiting VPEC to join as an industry partner. The reason was that partners were allowed to assign engineers to the VPEC laboratory, where they could work together with top-flight research personnel to develop new technologies. At that time, VPEC partners were all top U.S., European and Japanese companies, such as AT&T, TDK, Mitsubishi and Toyota. There were no Taiwanese partners, and moreover, Delta was a relatively small company at the time, with annual operating revenues of only around NT$3 billion.

So to make for closer cooperation and resolve barriers resulting from the vast geographical distance separating Delta and VPEC, following Cheng's October 1988 visit, he decided in January of the following year to establish a Delta research laboratory in the vicinity of Virginia Polytechnic Institute's campus in Blacksburg, Virginia.

'It happened so fast. I was really so surprised,' recalls Lee, chuckling as he recounted Cheng's energy and efficiency.

Additionally, and even more importantly, through Cheng's personal donations and the contributions of the Delta Electronics Foundation to various academic institutions, Delta consequently gained access to relevant research projects and resources at major domestic universities, and thus access to cooperative opportunities.

To achieve such large-scale involvement, Delta not only employs cooperative research projects with faculty and graduate students, but has also shown considerably agile use of external research institutions and resources.

Seizing Opportunities, Dynamic Use of Resources

Delta has also modified its corporate organization to more tightly integrate internal resources and rapidly link with external information sources.

In 2003, Cheng established a corporate development division and appointed R.T. Tsai to head it. Tsai had established and headed operations at Delta's plant in Mexico, and had just been rotated back from a posting in Japan.

One objective was to close gaps among business groups, which had often missed opportunities because of their independence in sourcing and transacting business. For example, long-term clients who had sourced power supplies and cooling systems through Delta remained unaware that Delta also offered networking and video products that would also meet their needs. Tsai's role is to act as timely matchmaker.

A more important aspect of Tsai's job is to act as a Delta scout, seeking out even more R&D resources and cooperative opportunities. For example, when Tsai is informed of active research planning, newly developed raw materials and even where there is an interest in transferring or authorizing proven technologies, he organizes the relevant information and keeps relevant departments informed.

After a life dedicated to research and development that has resulted in more than 100 patents to his personal credit, R.C. Liang, who just this year accepted a position as Delta's chief technology officer, comes straight to the point in describing the R&D capabilities of Taiwanese enterprises.

'With Taiwanese companies, it's ordinarily a lower case 'r' with an upper case 'D',' Liang believes. Few Taiwanese enterprises do basic research. Their capabilities and mentality energies are concentrated on the development phase, that is, taking a technology and commercializing it for manufacture. As for the time-consuming fundamental research that must come first, they allow it to 'come as much as possible from outside cooperation with domestic and overseas schools.'

Delta is the perfect example of a company making the best use of the power of cooperation in today's hyper-competitive and increasingly fast-paced business environment.

Translated from the Chinese by Brian Kennedy