SMHeuristics, Megaforce poised to formalize relationship

Sharon Fisher//September 18, 2019

SMHeuristics, Megaforce poised to formalize relationship

Sharon Fisher//September 18, 2019

photo of sgw designworks megaforce mou
Ryan Gray, left, of SGW Designworks and Eric Chen, of Megaforce, sign an MOU at Boise State University. Photo by Sharon Fisher

With two Idaho companies signing memorandums of understanding (MOU) with Taiwanese manufacturer Megaforce, will Boise-based sales and marketing company SMHeuristics be next?

In June, Megaforce signed an MOU with Meridian manufacturer PKG User Interface Solutions, while in September Megaforce signed an MOU with Boise product developer SGW Designworks.

For its part, SMHeuristics signed an MOU in August with Taiwanese medical company Brain Navi and was involved with introducing Megaforce and SGW Designworks.

Next steps

So, will Megaforce and SMHeuristics sign their own MOU at some point?

When Eric Chen, director of Megaforce’s biomedical business unit, visited Boise earlier this month to sign the MOU with SGW Designworks, he indicated that the two companies would likely take some action to formalize their relationship, but he wouldn’t provide details.

photo of derik ellis
Derik Ellis

“I don’t know if we’ll sign an MOU,” said SMHeuristics CEO Derik Ellis. “We’ve almost moved past that a little bit.”

But Ellis agreed that the two companies would likely enter a formal relationship of some sort.

“If a company we’ve come across wants to manufacture a medical part in Taiwan, I would definitely think we’d see a benefit financially if we sent them to Megaforce,” he said. “We’ve been looking for people who want to do contract manufacturing with Megaforce. If we bring someone in, we’ll negotiate a rate that Megaforce will be paying us.”

Ellis is planning to visit Taiwan as part of a nine-day gubernatorial delegation in October and expects to sign MOUs with other Taiwanese companies while he is there, he said. He said that he currently has meetings scheduled with four or five companies a day – “meetings with pretty sizable companies that would be phenomenal to bring to the U.S.”

“If it’s anything like the last trip, things will evolve over there pretty quickly,” he added.

Manufacturing partner

SMHeuristics is also working with SGW Designworks, both by providing sales and marketing expertise to them as well as by receiving manufacturing expertise from them.

“We’re working with a lot of manufacturing companies,” Ellis said. “We’re not a manufacturing company.”

SGW Designworks could help with that, Ellis said.

“Through talks, we’ve worked out that they can serve our customers as a manufacturing management partner, which we would pay them to do,” he said. “They would become our logistics partner.”

This partnership could contain several components. First, SGW Designworks could help determine whether the SMHeuristics client company’s proposed product is viable. Second, it could help evaluate the ability of a proposed manufacturing company to see whether it is qualified to produce the SMHeuristics client company’s proposed product. Then, once a manufacturing partner is chosen, SGW Designworks could manage the distribution and other logistical efforts, he said.

So far, the companies haven’t made any such agreements yet, Ellis said.

“There’s still a lot of blue sky in this,” he said. “It’s all evolving.”

That relationship has some similarities to the one that SGW Designworks has made with Megaforce.

Could Megaforce, SGW Designworks and SMHeuristics take the next step forward and merge at some point?

“If SGW and SMHeuristics wanted to, someday down the road, marry in some form, and all the tests showed it to be beneficial, I’d definitely think about that,” Ellis said.

Merging with Megaforce might be more problematic, however, because of the logistics involved in merging with a Taiwanese company, he said.

Taiwan has become the second-largest destination for Idaho exports, with exports increasing by 17.1% in 2018. Both the state and PKG have had relationships with Taiwan previously. Representatives from PKG took part in a trade mission to Taiwan in 2015, which was partially funded by a State Trade Expansion Program grant from the U.S. Small Business Administration.

Idaho exports to Taiwan are almost exclusively in the semiconductor and industrial sector, amounting to 96% of $675 million in 2018. Idaho imports from Taiwan are also largely in semiconductor and industrial, amounting to 83% of $462 million.