When Taiwanese smart-phone maker HTC launched its first own-brand phone in Asia this summer, it had professionals running the show: a dance theatre troupe was hired to perform the story of HTC's rapid rise from a tiny contract manufacturing outfit in 1997 to the world market leader for Windows-based smart- phones today.

But the company unwittingly gave a demonstration of just how big a leap it was taking in building its own brand. When the troupe led chief executive Peter Chou on to the stage, he looked slightly awkward - an engineer among dancers.

Many Taiwanese companies struggle with their new roles as they try to create their own brands because it is a far cry from the island's traditional business model of designing and manufacturing things for brand names owned by others.

HTC is finally pushing its own brand after more than a year of strategic adjustments that often left investors confused.

Meanwhile, Asustek, the world's largest manufacturer of computer motherboards and a significant maker of laptop computers, recently announced detailed plans for separating its contract manufacturing operations from its growing branded business this year.

BenQ, the electronics group that emerged from Acer's former computer peripherals business in 2001, is spinning off its brand operations in a desperate attempt to secure survival after the failed takeover of Siemens' handset business last year.

Giant, the bicycle company, is undergoing a big adjustment of its distribution network and marketing approach after a brand audit found that consumers rarely have the kind of passion for Giant bikes that every brand strives for.

Taiwan is home to world market leaders that consumers have never heard of - such as TSMC in chip contract manufacturing and Hon Hai in downstream electronics contract manufacturing - but, on an international scale, its brands are no more than start-ups.

There is not a single Taiwanese entry in the Global Top 100 Brand list compiled by branding consultancy Interbrand and Business Week. Even Trend Micro, Taiwan's most valuable brand, according to Interbrand, commands a brand value of about $1bn, less than half of Levi's, the name at the bottom of the Global 100 ranking, and tiny compared with the $67bn value put on Coca-Cola, the world's most valuable brand.

Taiwan's formidable success in contract manufacturing is one reason brand building is proving so difficult. Managements mostly have an engineering background. Experience tells them speed, high quality and low cost are the key to success - a recipe that does not suit a branded business.

"Being a Taiwanese branded company means making the best products but cheaper than everybody else," says Bonnie Tu, Giant vice-president. When the company had its brand image researched in Boston, Los Angeles, Paris, Melbourne and Munich last year, the message was that dealers loved Giant with its top quality products that boast advantages such as strong hydrofoam frames, but consumers were not interested in these strengths. "They think we have no character," says Ms Tu, who attends public functions in full bike racing gear to increase brand visibility.

Mark Stocker, a Taiwan-based branding consultant, says this is a common problem because Taiwanese companies are just too focused on technology. "You have to drop the technology message and move beyond that," he says. "Apple with its iPod, Samsung's products, or LG's chocolate phone are good examples of that."

The Taiwanese strong technology basis is also a burden in another respect. Most electronics companies have been reluctant to part with their manufacturing because they believe that engineers and access to manufacturing lines are the key to producing cutting-edge products. This attitude has led both BenQ and Asustek to drag their feet in separating branded and contract operations, resulting in the loss of valuable contract orders as customers saw a conflict of interest emerging.

Another challenge most Taiwanese brands share is the lack of a strong common push as a nation. Taiwan's government has identified the creation of brands as a long-term economic policy goal and is handing out grants for brand development.

The Taiwanese often point to South Korea as an example of branding success. The presence of Samsung and Hyundai among the top 100 global brands and the "Korean wave" phenomenon are frequently cited as models to emulate. But Mr Stocker says: "Something like 'Cool Korea' will never happen in Taiwan. It was all organised with a major, centralised government effort behind it."

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