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SMHeuristics, Megaforce poised to formalize relationship

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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.

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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.

PKG User Interface Solutions signs agreement with Taiwanese manufacturer

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Almir Garibovic, left, CEO and president of PKG User Interface Solutions, and Eric Chen, director of Megaforce’s biomedical business unit, signed a memorandum of understanding. Photo by Sharon Fisher.

MERIDIAN – An Idaho manufacturer has signed a memorandum of understanding with a Taiwanese company that could bring a share of $3.5 billion in funding to Idaho startups.

PKG User Interface Solutions Inc., which manufactures products in a number of industries including aerospace, and Megaforce Co. Ltd., in New Taipei City, signed the agreement on June 7.

Eric Chen, director of Megaforce’s biomedical business unit and global partnership alliance & joint venture, said 70% of the company’s clients are in the U.S., and a big percentage of them are in the Fortune 500.

“Because we have so many clients here, it makes sense for us to contribute more to establish our footprint and presence in the U.S.,” he said.

Megaforce has five manufacturing sites worldwide: three in China, one in Taiwan and one in Tijuana, Mexico. The company manufactures products in five clusters: military and government, such as energy storage and maximum security hand- and ankle cuffs; consumer electronics for companies such as mouse and keyboard maker Logitech; smart home entertainment systems such as Beats, Bose, Sonos and Plantronics; automotive products such as seat belts and internal panels; and minimally invasive surgical products such as a trocar, which inserts ports during surgery, and combination products that combine a drug and a device.

It’s the latter category that is of the most interest, Chen said. The collaboration will let Megaforce expand its scope from manufacturing toward more advanced and sophisticated medical equipment, such as ultrasound, he said.

Megaforce had been searching a number of other states — including Arizona, California, Florida, Mississippi, New York, Oklahoma, Pennsylvania and Utah— looking for a suitable partner, Chen said.

The companies are working with the Taiwan-USA Industrial Cooperation Promotion Office (TUSA), launched in 2012 under the auspices of the Ministry of Economic Affairs, and the Taipei Economic & Cultural Office in San Francisco. PKG works with a number of startups, and Taiwan has up to $3.5 billion to invest worldwide, said Wendy Lin, director of the latter organization.

Steve Lin, executive secretary of TUSA, met with Gov. Brad Little, and was on his way to Washington, D.C., to attend the SelectUSA Investment Summit. Idaho is also exhibiting for the sixth year at the conference, which is intended to showcase the state to potential international investors and increase foreign direct investment.

During the conference, Taiwanese dairy product manufacturer and co-packer Jetton Biochemistry Co., Ltd. announced that it will locate a new blended powder facility for production of a proprietary dairy formula in a commercial park in Nampa, hiring 25 local employees. The company estimated they will process close to 2.4 million pounds of dairy annually and plans to pursue opportunities to produce multiple product lines within the U.S.

 Little is planning to lead a nine-day trade mission to Taiwan and Hong Kong in October. Taiwan recently became the second-largest destination for Idaho exports, with exports increasing by 17.1% in 2018.

Both Idaho and PKG have had relationships with Taiwan previously. A year ago, Boise State University partnered with NEXCOM, a Taiwanese robotics company, to create a robotics lab in the university’s school of engineering.

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Sarah Massie

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, according to Sarah Massie, senior international trade specialist for the Idaho Department of Commerce.

In addition, the Idaho Aerospace Alliance signed an MOU with economic development officials from Taichung City, Taiwan, in 2017. The Idaho signatory was Homy Panahi, Idaho Aerospace Alliance president and former president and CEO of PKG.

Idaho companies such as Melaleuca and Micron also have major relationships with Taiwan, though Micron’s relationship is under some strain due to intellectual property issues. The country is also a market for Idaho agricultural products such as wheat.

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.

This article was edited on June 14 to add the Jetton Biochemistry deal.