Former Philips Executive Vice President Y. C. Lo passed away at Taipei Veterans General Hospital on May 11. He was 78.

Lo, who was born in China and grew up in Taiwan, started his career with Philips in Taiwan as an entry-level engineer in 1969. Thirty years later he had worked his way up to the position of chairman of Philips Components International B.V. He also broke through the glass ceiling that keeps minorities and women from rising to top corporate posts, becoming the first Asian in 1996 to join the board of directors in Royal Philips Electronics' 105-year-long history.

Lo is unique among Taiwanese entrepreneurs in that he worked for a foreign multinational his entire life yet made great contributions to the development of Taiwan's economy.

Philips Moves up the Value Chain alongside Taiwan

In the 1970s and 1980s, when export processing zones drove the island's domestic economic growth, many foreign companies served as springboards for ambitious Taiwanese entrepreneurs. Bruce Cheng, founder and honorary chairman of Delta Electronics, started out his career at American tech company TRW Inc. Raymond Soong, chairman of the Lite-On Group, originally worked at Texas Instruments Inc. Scott Lin, the co-founder of optical lens maker Largan Precision Co. Ltd., came from Baso Precision Optics Ltd., which was established by Robert Bosch GmbH of Germany.

In contrast to his peers, who left their corporate manager jobs at foreign companies to start their own businesses, Lo stuck with Philips. When RCA, Philco and other foreign enterprises that had entered Taiwan around the same time as Philips relocated their operations to countries with lower wages, Lo had the foresight and skills to help Philips move up the value chain hand in hand with Taiwan's industrial transformation.

During his 30-year career at Philips, Lo turned Philips Taiwan, which originally only produced products for export, into a global hub for R&D, manufacturing and sales for Philips Components International and Philips Consumer Electronics International.

During its boom years until 2000 – a year after Lo retired – Philips Taiwan remained the island's third largest manufacturing company with annual revenue in of NT$215.5 billion and more than 10,000 employees.

Just after Lo was transferred to Philips headquarters in Eindhoven, Netherlands, in 1996, he revealed in an interview with CommonWealth Magazine what motivated him as the man at the helm of Philips Taiwan.

"I had two motivations for doing my job, one was that I wanted to contribute something to the place where I lived, and the other was doing something for the company."

Lo's role in the founding of TSMC fully illustrates these "two motivations."

A 'Miracle' High-tech Investment

In 1985 when Morris Chang, then president of the Industrial Technology Research Institute, prepared the founding of TSMC with government backing he was frustrated that foreign and domestic companies showed little interest in investing in the joint venture.

Pointing to the stellar performance of a Taiwanese semiconductor plant under his command, Lo convinced Philips headquarters that Taiwan had the potential to develop a semiconductor industry.

Philips, which was the world's fifth largest semiconductor maker at the time, therefore decided to invest more than NT$2 billion in TSMC. The deal included the transfer of some Philips patents, which gave TSMC a head start and protected it against competitors.

As a result, Philips became TSMC's largest shareholder along with the Taiwanese government.

In 1988, when Chang had become chairman of TSMC and was preparing to take the company public, he demanded that Philips refrain from exercising its right to take a controlling stake in the company. Due to restrictions on foreign investors, TSMC would not have been able to list on the Taiwan Stock Exchange if Philip had acquired 51 percent or more of the company's shares.

Lo, who sat on the TSMC board at the time, again had to persuade Philips headquarters to go along. In the end, Philips accepted that the right to manage TSMC be transferred to Chang and his team.

The TSMC deal, which has become known in Taiwan's high-tech history as a miracle investment, earned Philips a return of 300 times its initial investment. Moreover, Philips was able to safely navigate the financial crises of the 1990s by raising money through the sale of its stake in TSMC.

In 1999, Lo suddenly retired from his posts at Philips due to a heart condition and returned to Taiwan. However, far from living the life of a retiree, he remained closely involved with Taiwan's semiconductor industry.

A few years ago, when Delta Electronics grew into a cumbersome organization, Lo, then an independent director on the company's board, suggested that Delta emulate the "One Philips" concept to strengthen horizontal integration within the company. "Otherwise, how do you grow bigger? How do you become a systems company?" notes Delta Electronics Chairman Yancey Hai in citing Lo's reasoning at the time. This triggered the launch of Delta Electronics' corporate restructuring program in 2010 under the slogan "One Delta."

While Lo had retreated behind the scenes, he continued to assist Taiwanese enterprises with industrial upgrading by sharing his valuable experience at the helm of a multinational company.

Translated from the Chinese by Susanne Ganz

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Y.C. Lo's Bio

1937  Born in Nanjing

1948  Flees with parents from China to Kaohsiung

1958  Begins to study at the Department of Physics at National Cheng Kung University; C. W. Chu, who would later become a famous superconductor expert, is among Lo's classmates.

1969  Joins Philips Electronic Building Elements Industries (Taiwan) Ltd. (PEBEI Taiwan, now Taiwan NXP Semiconductors) as entry-level engineer

1978  Becomes general manager of PEBEI Taiwan

1988  Takes over as president of Philips Taiwan, becoming the first Taiwanese to lead the company

1996  Promoted to president of Philips' Global Electronic Components Business Division, relocates to Philips headquarters in Eindhoven, Netherlands. Lo becomes the first Asian director in Philips' 105-year-long corporate history.

1999  Officially retires from his positions at Philips

2015  Passes away at Taipei Veterans General Hospital