From Textiles to Electronics: the Zau family of Zoong Sing, Microtron and EDL

York Lo: From Textiles to Electronics: the Zau family of Zoong Sing, Microtron and EDL

Earlier on the website, we covered many Shanghainese industrialists who have contributed significantly to the development of many different industries in Hong Kong in the 1950s and 1960s ranging from textiles to plastics. This article covers the family of Zau Sing-tao, the founder of Zoong Sing Cotton Mills in Shanghai whose grandsons started Micro Electronics (Microtron) and Electronic Devices Limited (EDL), two of the earliest electronics companies in Hong Kong in 1964 and 1969 and both firms remain leading players in the industry today.

Zau Sing-tao (邵聲濤), Zau Pao-fu (邵寶虎)and Zoong Sing Cotton Mills(崇信紡織公司) in Shanghai

Left: Zau Sing-tao (WKYP, 1959-11-30); Right: Zau Pao-fu (center) with members of the South China Athletic Association’s tennis team at the Hong Kong Open in 1963 (WKYP, 1963-8-23)

A native of Ningbo, Zau Sing-tao was born in 1877 and was the proprietor of two fabric trading firms in Shanghai – Zoong An (崇安紗花號) and Ta Chang Feng Kee (大昶豐記紗花號) and was one of the three major players in the fabric business in Shanghai along with his fellow Ningbo natives Wu Lin-shu (吳麟書, 1878-1930) and Hsu Ching-yun (徐慶雲). (上海工商人名錄, 1936)

In the late 1910s, Zau Sing-tao teamed up with others to start two leading cotton mills – Zoong Sing Cotton Mills in 1918 with Wu and another fabric merchant Pei Wen-king (邊文錦) and Tung Yi Cotton Mill (統益紡織公司) in 1919 with Wu, Hsu and comprador Woo Yiu-ting (胡耀庭). Zau was more involved with Zoong Sing which had its registered address at 8 Rue de Consulat and recorded profits of 301,38 taels for the fiscal year ending June 1926. The firm had authorized capital of 2 million taels of which 1.5 taels was paid-up. (Chinese Economic Bulletin) After Wu Lin-shu died in 1930, his position at Zoong Sing and Tung Yi was succeeded by his 25 years-old son Wu Jui-yuan (吳瑞元) and Pei was succeeded by his son Pei Sui-ching(邊瑞馨, 1890-1968). Other directors of Zoong Sing by the 1930s included the Jewish brothers R.M. and Ellis Joseph, former Finance Minister H.L. Huang and the “king of dyestuff” Pei Yun-sheng (貝潤生,1870-1947).

In August 1937, Zau Sing-tao made the headlines nationally when he donated 50000 dollars towards the anti-Japanese war effort and telegraphed Generalissimo Chiang Kai-shek.Zau was a co-founder of the Shanghai Stock Exchange which Chiang participated in as a punter in the early 1920s before he emerged as the leader of the Kuomintang. (KSDN, 1937-8-18)

By the 1940s, Zoong Sing was operating out of 20 Ningbo Road and Zau’s eldest son Zau Pao-fu(1911-1984) had joined the mill as manager after an earlier stint at a foreign import export firm.  (上海百業人才小史, 1945) In 1948, Chiang Ching-kuo presided over a witch hunt of capitalists in Shanghai and Zau Pao-fu was one of the targets. According to press reports, the police raided his palatial home where they found HK$534,000 and US$1861 in cash hidden in a dozen safes. (WKYP, 1948-9-29) After this episode, the Zau family moved to Hong Kong.

Sing-tao’s wife died when he was 47 and he never remarried. After he came to Hong Kong in 1949, he retired from business and became a Christian in February 1958. He died in November 1959 at the St Teresa Hospital in Kowloon at the age of 82 and was survived by two sons (Pao-fu and Pao-hsiung), six daughters and over 60 grandchildren. His funeral was attended by the who’s who from the Shanghainese community in HK including textile industrialists C.C. Lee, N.C. Chang and Chi-yue Wong, the Dzung family of Tabaqueria Filipina (see article) and others such as Chan Ting-yu of Lingnam Hardware (see article) and Chan Him (see Tung Kin Land article). One of Sing-tao’s daughtersTsui-ngomarried Wang Tao-wei and their daughters Helen Wang and Nancy Wang married Geoffrey Yeh of Hsin Chong Construction and Kenneth Ting (丁午壽) of Kader Industrial respectively. One of Sing-tao’s granddaughters married K.K. Zee, the founder of the famous local brokerage house Shun Loong. Sing-tao’s daughter Tsui-ying married his business partner Pei Sui-ching’s son Pei Kee-ching (邊繼卿). Kee-ching’s niece Diana Bin Min-chi (daughter of Pei Pao-ching, English surname became Bin with Cantonese pronunciation) married Kenneth Fang (方鏗) of Fang Brothers Knitting and another nephewGordon Pei Yaw-liang (邊耀良,son of Pei La-ching and Chow Moo-yuen) and his sons Conrad and Benjamin are all doctors in HK and Gordon’s wife Delia Pei Chen Chi-kuen (邊陳之娟) is best known as the founder of the Funful kindergartens. ZauPao-fu was a church elder in Kennedy Town and died in December 1984 at the age of 73. (TKP, 1984-12-29)

Tommy Zau Yen-chung (邵炎忠, 1935-1996) and Electronic Devices Ltd (益電半導體)

Left: Tommy Zau (first from the right) assisting the wife of Philips vice chairman at the ribbon cutting ceremony of the new EDL plant in Kwai Chung in September 1974 (KSEN, 1974-9-27); Right: Tommy Zau (center) with four of his staff members who were sent to Philip’s head office in the Netherlands for training in 1974. (KSEN, 1974-10-19)

Zau Pao-fu and his wife Chen May-ching had three sons, the eldest of whom Tommy was born in Shanghai in 1935. Tommy graduated from the Bradford Durfee Technical Institute in the UK in 1958 and in September of the same year married Lillian Ting Yuk-ying (丁玉瑛), the granddaughter of Ting Hou-ching, the Shanghainese cigarette tycoon who had moved to Brazil. Tommy worked as a lecturer at the HK Technical College from 1959 to 1964 before starting Micro Electronics Ltd. to make transistors out of 1”-2” Silicon Epitaxial Wafer for firms such as National Semiconductors and Philips with the backing of his family. As explained by Tommy in an interview with Next Magazine, the family did not choose to re-enter the textile business in HK and chose electronics instead because of less competition and lower capital requirement.In 1969, Tommy formed EDL with Philips (which first established its branch in HK for trading purpose in 1948) to make transistors and left the management of Microtron to his younger brothers.

Within four years, production at EDL had grown tenfold and its headcount had grown to over 1000. To accommodate the growth, the firm moved into its new facility in 100 Kwai Cheong Road inKwai Chung in September 1974 which was opened by the vice chairman of Philips and managing director of Philips HK. (KSEN, 1974-9-27)

One of EDL’s success factors was treating its staff well. When rice prices soared in early 1974, EDL discussed with the Department of Industry & Commerce to purchase rice directly from importers and sold them at cost to its staff members. (KSDN, 1974-5-20) In October, EDL sent four of its staff for training at Philips’ head office in the Netherlands. In January 1978, EDL held its annual dinner at Ocean Palace in TST for its over 1000 employees and guests with performances, games and lucky draw for free trips to the US for children of staff in Chinese New Year. The factory had its own library and recreation room and the firm organized many outdoor activities for its staff and often consulted them for ideas on meals it provided. (WKYP, 1978-1-4)

Tommy Zau (first from the right) seeing off the six children of staff who received free trips to go to the US in 1978 (WKYP, 1978-2-16)

In January 1979, EDL had its annual dinner at Maxim’s Palace and for the second year in a row sponsored free trips for children of staff to America with additional headcounts. At the time, the factory was on a recruitment drive. (WKYP, 1979-1-9)

As a pioneer of the HK electronic industries, Tommy Zau was involved in many industry efforts such as serving as chairman of the Electronics Industry Training Board of the VTC, chairman of the electronics industry group at the Federation of HK Industries (FHKI) and vice chairman of the Chinese Manufacturers Association and frequently spoke to the press on issues related to the electronics industry. In July 1981, Tommy Zau told the press that he believed the electronics industry had the potential to become the top industry in HK and expected full automation within 3-5 years. (TKP, 1981-7-17) Later in the year in November, the HK government sent a group of foreign guests to EDL to convince them to open factories in Hong Kong. As a follow up to that, Tommy wrote an editorial in Ta Kung Pao shown below where he argued that instead of spending the money to attract foreign investments, the HK government should find ways to help existing electronic manufacturers in HK so that they don’t go under – including lower taxes and less labor regulations which were making it difficult for local electronic manufacturers and resulted in many closures.

Tommy Zau’s essay “Why so many factories are closing?” in Ta Kung Pao lobbying the HK government to support local electronic manufacturers in 1981 (TKP, 1981-11-17)

In 1983, EDL produced 150 million transistors and grew its headcount by 20% and its production and sales increased by 47% and 46%. (WKYP, 1984-1-4) When Disneyland opened in Japan in August 1983, EDL sponsored over 20 staff and their children to visit for 6 days. During Chinese New Year 1984, EDL sponsored 35 employees based on seniority to visit the West Coast of the US and Mexico for 11 days. By that time, the firm had sponsored free US trips for over 140 workers since 1978. (WKYP, 1984-2-11)

In 1984, EDL invested $30 million in new equipment which was a 130% increase over 4 years, increased its headcount by 45% and its factory space by 70 percent with record production output. At the time, the firm was producing 6-7 million transistors per day and its daily output had grown over 100 fold since its inception in 1970 and its workforce had grown from 800 in 1979 to 1300 that year while its production had grown seven times during that same period thank to automation. The firm also placed heavy emphasis on quality control, having much lower defect rate than industry norm of 1000-1500 per 1 million units with target of 50 defects per million in 1984 and 25 defects per million by 1985. (TKP, 1984-4-4)

In May 1984, Tommy Zau argued against a report which asserted that HK did not have the financial, technology and human capital to develop its electronic industries. The orders for hands free phone from the US dropped 90% at the time but demand for components for computers and television remained strong. At the time, 70% of EDL’s outputs were exported to Europe and 20% were sold locally and 10% to mainland China. (KSDN, 1984-5-14)

In October 1984, Tommy Zau led a delegation of 21 “young” HK industrialists including Lau Yee-ing of Feoso and Yung Hung-jen to visit Beijing, Nanjing and Shanghai. Before that in April, he met with Chinese leader Deng Xiaoping. (TKP, 1984-10-21)

Tommy Zau speaking at the EDL annual ball in 1985 (WKYP, 1985-1-5)

In January 1985, EDL held their annual dinner at the Ocean City Restaurant in the New World Centre and the event was attended by over 1600 employees and their guests. (TKP, 1985-1-5) At its peak, EDL had over 1800 employees with annual production of 2 billion transistors and was the largest electronics component manufacturer in Hong Kong and one of the world’s largest manufacturers of transistors.

In 1991, Tommy Zau accepted the ISO 9000 certificate on behalf of EDL from T.H. Chau, Director of Industry and Commerce (CMA Business Journal, 1991) He died at home in February 1996 at the age of 60.

In 1999, Philips acquired the Zau family’s stake in EDL and as a result EDL became a wholly owned subsidiary of Philips and was rebranded Philips Semiconductors – EDL. Philips Semiconductor was sold to a consortium of private equity investors in 2006 and rebranded NXP. As a firm, EDL was dissolved in 2014.

Outside of EDL, Tommy Zau was also a non-executive director of two listed electronics firms founded by his fellow Shanghainese industrialists – General Electronics which was started by the Fang family (whose cousins control Fang Brothers Knitting and Toppy/Episode) and National Electronics founded by the Lee family which also went to Brazil like his wife’s family.

Outside of work, Tommy was a foodie – in fact he joked to the reporter during an interview with Next Magazine that he “preferred fat” while other people talked about “reducing fat”. He also allegedly served shark fin soup in a buffet setting to his staff at EDL. Tommy and Lilian have three sons – Tommy ZauJr (1959-2010), Timothy Zau and Mark Zau. Tommy Jr worked for EDL-Philips where he ran the IT department and tragically died in an auto accident in Hokkaido in 2010 along with granddaughter of Stanley Kuo of Woodard and Gunzetal (see article).

Bernard Zau Shou-chung (邵守忠) and Micro Electronics (美科有限公司)

Left: Bernard Zau; right: article and picture of the wedding of Bernard Zau in 1964 (WKYP, 1964-8-16)

After Tommy Zau started EDL in 1970, the leadership of Microtron was passed to his younger brother Bernie Zau and Zau Hau-chung. Bernie studied electrical engineering in the UK and married Yeh Pi-kwang (葉璧光), the eldest granddaughter of Godfrey Yeh of Hsing Chong Construction (see article) and daughter of David Yeh Mou-chang (whose younger brother Darius married a cousin of Tommy’s wife Lilian while another younger brother Geoffrey married Helen Wang, another cousin of Bernie and Tommy), deputy manager of Dah Sing Bank in 1964.Hau-chung married a daughter of HK torchlight industry pioneer Chan Ting-yu. (see article on Lingnam Hardware and Sing Chow)

In 1972, Microtron made rectifiers for Westinghouse. In October 1974, Micro Electronics laid off 110 of its over 1000 workers with 6 days pay in severance, most of whom were female workers who had worked for the firm for less than 2 years. The disgruntled employees took to the Labor Department to demand 10 days worth of pay and their case was handled by Chow Tung-shan, who befriended the Zau brothers as revealed in a court case decades later regarding his language center business after his retirement which Bernie Zau was called to testify. According to ZauHau-chung who spoke to the press, the layoff was normal course of business and the firm had no business or financial issues. The dispute was settled after negotiations at the Labor Department (WKYP, 1974-10-8; TKP, 1974-10-9)

In the mid-1970s, Microtron made its foray into a variery of new areas within the electronics industry. In 1975, it began manufacturing of LCD watches and video baseball games. In 1976, Microtron formed a 50-50 joint venture called Microdyne in partnership with Silicon Valley gallium arsenide producer Epidyne to make light emitting diodes. (Asian Finance and Electronics Industry, 1976) As a firm, Microdyne was dissolved in 1995.Also in 1976, Microtron launched a line of medical electronic products called Respironics and Respironics (HK) Ltd (偉康醫療產品有限公司) was incorporated in 1981.

In April 1976, 101 employees of Microtron got food poisoning after eating chicken during their overnight shift and 63 of them were hospitalized in 3 hospitals. At the time Microtron had over 2000 workers and the night shift ran from 1030pm to 630am. The factory at the Microtron Building at 38 Hung To Road in Kwun Tong provided three meals per day plus late-night meal for the overnight shift which cost HK$2.20 per worker.  (KSDN, 1976-4-24)

In the late 1970s and early 1980s, Microtron did OEM assembly for major US, European and Japanese firms such as Telefunken, Sony, Mitsubishi and Mattel.

In 1984, Microtron won a 2 year, HK$10 million contract from American CRH to manufacture 80000 computer disk drives in 1984 and 250,000 in 1985. At the time, the global disk drive market was projected to grow at the rate of 35-40%. (WKYP, 1984-3-6)

In 1986, Microtron set up its first factory in the mainland inBuji near the Shenzhen border and began making LED display for Whirlpool in 1991. In 1998, Microtron moved from Buji to Gongmingin a campus which included a 6-floor factory building and a 7-floor dormitory building.

In 2004, Microtron moved its office in HK and began assembling resistors for Ohmite in 2006.

Sources (other than those cited above):

https://prabook.com/web/yen_chung_tommy.zau/378481

http://www.microelectr.com.hk/history.asp

https://blog.boxun.com/hero/201411/huzhiweiwenji/10_1.shtml

This article was first posted on 30th July 2021.

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