Founded in 1997, for over 25 years ITEQ has focused on Copper Clad Laminate (CCL), which is the key material for Printed Circuit Board (PCB). In the past, ITEQ generated over 50% of its revenue from Consumer Electronics, but since Audrey Tsai assumed the role of CEO and President in 2015, ITEQ has transitioned to a multifaceted leading electronic material supplier.
Audrey’s strong emphasis on operational excellence is supported by her background in finance. Since being appointed as ITEQ’s CEO, she has continued to upgrade and optimize the company’s product offerings. Starting from 2019, ITEQ has consistently generated over 50% revenue from Server/Networking-related high-speed applications. In addition, the company became the world’s third largest supplier of Specialty Laminate (including high speed, package substrate, and RF) with a 12% market share, and the world’s second largest supplier of halogen-free CCL, with a 14% market share in 2020.
With Audrey’s success in upgrading ITEQ’s product portfolio, Not only has the company shown revenue growth for six consecutive years (a CAGR of 9% in 2015-2021), but also a robust increase in net income (a CAGR of 35% in 2015-2020 and a growth of 24% YoY for the first three quarters of 2021). Looking toward the future, Audrey has already mapped out ITEQ’s growth pipeline through 2025, and is ready to lead the company to the next level.
“Pragmatic” is how clients describe Audrey Tsai
While Taiwan has the largest PCB supply chain in the world, it is rare for a female CEO to helm a company in this industry. Audrey says, “Some clients described me as a ‘pragmatic’ person. Perhaps this is because I always focus on the core to satisfy clients’ needs and ensure things stay on course. Through this process, we have developed close relationships with clients. Whenever they need an update in regard to the latest technology or industry trends, they come to us. Since I took on the CEO position, ITEQ has always worked with customers embracing a customer-centric mindset. We continue to focus on building long-lasting partnership with clients.”
Audrey states firmly, “What ITEQ offers is high value-added ‘material science.’ We are not just another manufacturing plant. We always adhere to the philosophy of ‘quality first, customer first, and being one step ahead of customers' needs.’ On top of securing steady long-term orders based on the existing collaboration with PCB customers in serving end customers, ITEQ also delivers products for customers’ future needs, which creates a win-win situation. We also closely work with strategic suppliers to ensure a stable supply of raw materials. Some clients described me as one-of-a-kind in the industry; but this is me, and that’s how ITEQ ought to conduct business.”
Factor green environment into corporate DNA, and put it into practice every single day
Ms. Tsai placed heavy emphasis on Green Products very early. She told us that “It is imperative that we incorporate environmental initiatives into our product development. ITEQ now is the world’s second largest lead-free and halogen-free CCL supplier. When we develop new materials, we always take environmental impacts into consideration. We also review all the raw materials and packaging materials used by our suppliers to minimize environmental impacts as well as through recycling and reusing resources. For example, the wastewater recovery rate for our Taiwan plant has reached >99%. Instead of assessing this simply from the cost-saving perspective, we place considerable value on wastewater recycling, and are willing to do all we can to achieve environmental sustainability.”
“In addition, our team also puts continuing effort to further optimize manufacturing processes, so as to rationalize manufacturing time and reduce energy consumption and carbon emissions. Specifically, to reduce the energy consumption of coal-fired boilers during the manufacturing process, we leveraged engineering design coupled with selecting appropriate materials to streamline our manufacturing process and reduce environmental impacts by reducing manufacturing hours. Perhaps not every company in this industry would take similar measures, but these are the directions we are taking and putting it into practice every single day.”
“Most important of all, I cannot be the only one in ITEQ who attaches a high level of importance to environmental protection. It requires ongoing employee education to instill environmental consideration into our corporate DNA. We start with obtaining the recognition from 5% of all employees, followed by 10% and then 20%, creating the chain effect to impact more employees. In our manufacturing process, from the input of raw materials to the output of finished products and packaging, there are many quantitative indicators that can precisely measure the impact on the environment. Thus, in order to achieve the goals of these indicators, we have to persuade a group of people to work together with the same course of action.” Audrey believes, “We know ourselves best, and we must work towards a sustainable future.”
Drive operational excellence with solid management style
How has ITEQ continued to drive operational excellence in the past 6 years? Audrey says, “The most difficult part is people management. The key is effective communication, on which I place a higher priority than setting key performance indicators (KPIs). I care more about execution processes than results. Through listening to employees’ description of the execution processes, I would be able to anticipate if the desired outcome were achievable. Thus, I would focus on communicating with employees to discuss the processes and express my rationale.”
Audrey further explains, “For example, I would stand in the perspective of front-end operators and tell managers: ‘If I were an operator and not even I could achieve the goal you set using the process you described, why would you believe they could achieve it?’ Sometimes, our employees would respond that, ‘It seems like that you are on site watching us.’ I firmly believe that without precise logic and execution procedure, it is impossible to reach desired results. I must assist every employee to simplify their tasks and achieve their respective goals. This is never easy. It requires strong enthusiasm and patience to train talent from various aspects, so that they can understand my management style, share my passion, and work toward mutual goals.”
Additionally, ITEQ’s main manufacturing sites are located in China, and it is crucial for the company to continuously elevate its production efficiency and optimize its costs. Ms. Tsai elaborates, “In the past, I spent a great amount of time in ITEQ’s China factories to adjust and improve the operating efficiency of each factory one by one. I would gather all relevant employees in the same job function from all manufacturing plants and explain the issues and adjustments all at once, to improve the efficiency of a certain area of operations. I also adopt a mechanism of rotation for employees in different factories, which allows them to supervise and compete with each other. Another key point was to use different measures to let employees not become complacent with the status quo, stimulating them to think outside the box. I believe, if one only confines his or her perspective to what he or she focuses on and lacks overall consideration of other aspects, his or her scope will not be broad enough.”
When asked whether such management style of taking solid steps to pave the way to operational excellence is what sets ITEQ apart from other Taiwanese competitors, Audrey replies, “Each of the Taiwanese CCL players, including ITEQ, has its own history of development and competitive advantage in different applications. Specifically, for ITEQ, over years of effort and hard work, we have not only become the world’s largest supplier of server CCL, but also been able to offer Specialty Laminate for various applications with continuous innovation in material science. Our strategy is very clear. That is, cautiously and pragmatically adjust our management philosophy and improve company fundamentals step by step to drive sustainable growth.”
Aim to be World’s No.1 High Speed Material and Specialty Laminate Supplier by the End of 2025
Says Audrey, “The goal I set in 2018 was that by 2022, ITEQ’s product quality should be comparable to global leading companies in the fields of high-speed CCL and specialty laminate. Today, we are very close to this goal. My next target for ITEQ is to become the world’s largest supplier in high-speed material and specialty laminate by 2025.” Audrey emphasizes, “In addition to measuring it with revenue scale, it is also important to see what we can contribute to the industry. We aim to have a head start over major international players in developing, designing, and manufacturing world-leading high-end and specialty laminate electronic-grade materials, and surpass them in terms of market share. This is our definition of being an industry leader.”
Audrey further adds, “To achieve our 2025 target, we are taking many actions for early preparation. Key directions of adjustments include three aspects: talent, technology (including products) and plant management. First, ITEQ must have an investment in talents to develop advanced high-end materials and reach the goal of being an industry leader. Both engineers and sales require creative thinking to develop different products to pave the way for our future growth. As a result, starting from 2019, we launched a program in Taiwan, which offers not only an off-cycle salary increase for graduates to have a starting salary comparable to that of TSMC, but also training for core talents.”
“Second, technology capability is certainly another focus. We have to continue developing many advanced new materials to ensure our products will meet future industry trends and diverse applications required by customers. Although these new materials may not be converted into revenue or EPS immediately, it is important for us to march forward with innovations. We cannot control the time as to when a new material will be materialized in an industry application, but we must closely follow industry trends.”
“More importantly, Copper Clad Laminate (CCL) will not be the only product for ITEQ. We will leverage our core technology in coating and material science of products other than CCL for different applications. For example, ITEQ and Mitsubishi Gas Chemical (MGC) announced the establishment of a joint venture at the end of 2020, which will focus on developing IC Substrate (BT Substrate) materials for semiconductor packaging applications. This demonstrates our determination to continuously expand our capability of technology migration and sector applications, and we will keep up the pace in offering more products in the future.”
“Last but not least, our manufacturing plants must be able to stay on top of the technology requirements of this product development. In addition to professional engineers, we also hire many front-end operators. Given that there’s a ceiling for manufacturing plants to be fully automated, it is critical for our operators to have sophisticated technical capabilities to match and support future materials development trends. In addition, while we already use relatively less manpower compared to other peers, we will continue to increase the level of automation and optimize our internal manufacturing process to further strengthen the control of our product quality.”
From 2015 to date, Audrey Tsai’s management philosophy has served ITEQ well, allowing it to gain a foothold in the global high-speed materials and specialty laminate market. Looking ahead, Audrey expects the demand of high-speed CCL will continue to rise, driven by multiple applications including data center, high performance computing (HPC), automotive and smartphone. ITEQ is ready to surpass peers in market share. It completed two rounds of fundraising in 2020 and 2021 respectively to expand its capacity in the JiangXi Plant, in preparation for the future growth. Audrey adds, “Our 2025 goal is not merely a slogan. We have set specific targets at each operational level every year. We are committed to exerting all effort in achieving the goal of becoming the world’s most influential electronic material supplier and No.1 supplier in high-speed materials and specialty laminate.”
If you would like to arrange a meeting with ITEQ, please contact yvonnehuang@qtumic.com.
The QIC team consists of experienced finance industry professionals that have worked in major sell-side and buy-side companies. We leverage our industry knowledge and relationships with institutional investors to assist companies and investors to achieve effective two-way communication to enhance shareholder value. QIC also has many years of experience in corporate access services. We plan, schedule and execute tailor-made roadshows and targeted investor events for high-quality corporate clients. QIC does not provide execution services and is thus considered MiFID II-exempt by institutional investors, who welcome QIC’s services and access to senior management of quality companies. If you are interested in learning more about QIC and its services, we welcome you to contact us.