Delta, Vivitek and economies of scale - Chinese style!
The biggest company you’ve never heard of…
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2China is big - really big. Until you’ve actually seen it with your own eyes, it’s difficult to comprehend the scale of the country or the sheer size of its population.
There’s a reason the Asian giant has become the factory of the world - nowhere else can provide facilities this extensive and a work force this large. There are economies of scale and then there’s China. A strange by-product of China’s rapid growth and accelerated development is the appearance of vast cities you’ve never heard of and huge companies which might well be unfamiliar. A good example of this is Delta, a Taiwanese-owned company that, whilst not being a household name, is absolutely huge. It’s a safe bet that you already own a product that uses a component made by Delta, you just don’t know it. For example Delta make many of power supplies for Apple and specialised chips for most smartphones.
The company was established in 1971 and has facilities all over the world, including Taiwan, the US, Europe and China. They reported revenues of $7billion in 2012 and each year they spend 5-6% of the total group sales on research and development. As a result, they have over 7,500 research and development engineers spread across the globe. Delta has taken an increasingly large role in the creation of more effective power supplies and their mission is to provide innovative, clean and energy-efficient solutions. To put things in perspective, an increase in the energy efficiency of Delta products worldwide by just 1% would save 5 million tons of CO2 from being pumped into the air.
Delta is a Taiwanese-owned company that reported revenues of $7 billion in 2012.Delta’s primary products are in power electronics, accounting for 50% of worldwide revenue. These include computer power supplies, mobile power supplies and electronic components for fans and thermal management. They also make energy management products for industrial automation and telecom power systems. They manufacture UPS (uninterrupted power sources) and data centre infrastructures, along with renewable energy and automotive electronics including electric cars. Delta’s chairman has been keen to expand their smart green life products which include LED lighting solutions such as street lighting, healthcare devices like glucose meters, voice intelligence platforms, networking systems and display technologies.
It’s the latter that will be most familiar to readers of AVForums because both Vivitek and Digital Projection are brands of Delta. Vivitek was established in June of 2008 and launched at IFA in the September of that year. Vivitek’s global headquarters are in Taipei, the European head office is in Amsterdam, in San Francisco for the US and the Chinese one is in Shanghai. Vivitek’s aim is to develop and establish a unique brand, aiming at the mid-end of the market. Vivitek use a combination of innovation and high performance to produce projectors aimed at meeting rooms, classrooms, home entertainment, video walls (front or rear projection) and larger venues.
Vivitek was established in June of 2008 and launched at IFA in the September of that year.Whilst Delta themselves offer the entire range of projectors from pocket models to large venue machines, Vivitek concentrates on certain key markets. So they don’t make low resolution, low lumen PICO projectors, nor do they make the big 20,000 lumen 3-chip machines. Vivitek’s line-up includes portable projectors like their new Qumi LED pocket projector, which you can take anywhere. There are other entry level models that are equally as portable, weighing only 2kgs but can put out a whopping 3000 ANSI lumens. They also offer multi-media projectors with Full HD, fixed lenses and up to 8000 ANSI lumens; as well as education projectors with both short and ultra-short throw lenses. Whilst Vivtek don’t make dedicated home theatre projectors, they do make projectors aimed at casual entertainment without the need for a dedicated room. They currently offer two 3D models as well, the H1180HD and the H1185HD.
Although display solutions is only a small part of the Delta group, accounting for 7% ($500 million) of group revenue, it is a large part from a branding perspective. Vivitek only sell through distributors - single or multiple depending on their coverage - and the brand is active in 35 countries, including 16 in Western Europe, 14 in Eastern Europe and 5 in the Middle East. Vivitek offers 55 different SKUs and even provides a reseller app for iOS that offers offline support for anyone selling Vivitek products. Vivitek admit that it has been a difficult few years for the projector manufacturers, with the technology coming under increasing pressure from larger screen TVs. However, since Vivitek feel that the big screen experience doesn’t really start until at least 100-inches, the company believe that the market still has potential, with growth forecast between now and 2017.Vivitek believe that the projector market still has potential, with growth forecast between now and 2017.The reason for our visit to Shanghai was two-fold, partly it was to learn more about Delta but also to see first hand their production facilities which are situated just outside Shanghai. The city itself is simply huge, with a population of 23 million, making it the largest city in the world by population. The famous Bund has retained much of its old world charm, with colonial buildings built by the Europeans when Shanghai was occupied by the British, French and Americans before the second World War. However it's Pudong, just across the river, that catches the eye. There is no better symbol for China’s explosive growth than the towering skyscrapers that have mushroomed inwhat was farm land only twenty years ago. It looks so futuristic that you expect to see flying cars zooming over your head. Certainly anyone coming to China expecting a third world county will have that myth rapidly dispelled as they travel at 431 kilometres an hour from the airport into central Shanghai on the Maglev train.
We stayed at a hotel complex in the city of Suzhou which is owned and built by Delta and the company clearly plays a major role in the development and prosperity of the city. Much like the Pudong area of Shanghai, Suzhou has changed beyond all recognition from the sleepy tourist destination of twenty years ago. Whilst Suzhou and it’s neighbouring city of Hungzhou are famous for their canals and lakes, the area now houses a vast industrial complex. The population of Suzhou has increased exponentially as workers move in from more rural areas and it now stands at 6.4 million people. When you add the population of Wujiang, which is where Delta’s factories are actually situated, the population increases to 14 million - which is larger than any European city except Moscow.
The scale of Delta's factories is just staggering and the complex in Wujiang employs an impressive 27,000 workers.The scale of Delta's factories is just staggering and the complex in Wujiang employs an impressive 27,000 workers. Interestingly most of these employees - 24,000 to be precise - are women, usually between the ages of 18 and 30. These girls move from rural areas into the city, where they work for a few years earning money for themselves and their families before returning home to get married. Delta provides for all their needs, with accommodation, restaurants, sports facilities and other recreational activities. It might seem strange to those of us raised in the west but in a country where there's still significant poverty in the countryside, the benefits of working in the large industrial areas becomes obvious. Delta provides extensive education and training and they also rotate people’s jobs so that they remain fresh and get plenty of experience. The employees work from 8am until 5pm with an hour for lunch from Monday to Friday. There is also the option to work on Saturdays and Sundays although the employees are legally limited to a maximum of 120 hours overtime in a month.
As we walked around the factory floor the gender bias was immediately obvious but given the amount of intricate work required, small delicate hands are a definite advantage. We also noticed that everyone works standing up, which is apparently better for your back. There is a degree of automation but a surprising amount of the work is done by hand due to its complexity. With the exception of the bulbs and the DLP chips themselves, every other part of their projectors is made in-house by Delta. That includes the circuit board, power supplies, lenses, colour wheels, connections and chassis. The optical engines are assembled in clean rooms, whilst other areas have ESD (Electrostatic Discharge) protection. What is very apparent is that quality control plays an important part of the production process. All the components are checked and every projector is tested individually.
With the exception of the bulbs and the DLP chips themselves, every other part of their projectors is made in-house.There are dedicated dark rooms where the panel alignment is checked using cameras and monitors. The uniformity is also checked, whilst the brightness and colour accuracy are tested using expensive Minolta colour meters. Inputs are also tested for multiple sources and multiple video formats. The lens shift mechanisms are tested for accuracy and can be used over a thousand times and still return to the same point. They even rotate the projectors to ensure that they will work flawlessly in either stand or ceiling mounts. Along with Vivitek and Digital Projection, Delta also make projectors for Optoma, NEC, Barco and, we suspect, many others. In fact watching how complicated it is to assemble a 3-chip DLP lens assembly, we began to realise why they were so expensive. You can at least see where a lot of the cost goes in terms of increased man (or woman) hours, additional training, greater complexity and the overall quality of the components.
In terms of the future the promise of a new lamp technology caught our attention and we were pleased to hear that Vivitek are investigating the use of a LED/Laser hybrid light source. Vivitek explained that LEDs are omni-directional which is why they tend to be limited to around 1,000 ANSI lumens. You can increase the power but that just generates more heat rather than more lumens. Lasers on the other hand are very directional and thus much brighter but obviously there are safety concerns. The solution is a hybrid light engine that uses red and blue LEDs and a blue laser bounced of a green phosphor disc. This provides greater lumens, longer life and more consistency, although such a solution isn’t necessarily right for every market. They aren’t really cost effective for areas such as education, where improved bulbs and filterless designs mean an increased lamp life of 8,000 hours. However it could have interesting applications for areas such as home entertainment.
We were pleased to hear that Vivitek are investigating the use of a LED/Laser hybrid light source.Vivitek also plans to launch a new 3D projector at ISE in February, although it would seem that the appeal of 3D is on the wane these days. In addition they plan to launch projectors with more flexible lenses, increased connections and new colour schemes. The only area where Vivitek don’t currently have any plans is 4K because they are dependent on Texas Instruments for the DLP chip and currently there isn’t a single-chip 4K solution available. However whatever developments are ahead for the projector market, you can be sure that Delta and Vivitek will be at the forefront, taking full advantage of their expertise, their facilities and their economies of scale to help push the boundaries.
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