An-Chi Tung

An-Chi Tung - Taiwan’s Semiconductor Industry What the...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Taiwan’s Semiconductor Industry: What the State Did and Did Not An-Chi Tung* Abstract Relative to Korea, Taiwan’s semiconductor sector combines high value-added, low risk, and an innovative mode of virtual integration, which is adapted to the new world of “fabless” and “chipless” operations, away from the older style of integrated device manufacturers. The rise of this owes much to the catalytic govern- ment role which overcomes market failures to launch institutions in each of the five stages of the industry’s evolution, introducing pre-commercialization research, nurturing industrial clusters, providing venture capital, and spinning off world-class, privately managed firms as well as attracting the interest of traditional business groups, without ever micro-managing the development as bureaucratic state enterprises. The state operates in a manner which is both distinctively different from the practice of Brazil, India, Japan, Korea, or Singapore, and also apparently replicable elsewhere. 1. Introduction The electronics industry has become the most dynamic sector in East Asia since the 1980s. The region as a whole has succeeded in exporting huge volumes of PCs, disk drives, semiconductors, televisions, and telephones. More importantly, some economies in the region have developed significant technological capabilities in the semicon- ductors sector, whose development has been key to the continued progress of other electronic products through its dual influences in both product and process technol- ogy . Korea’s Samsung, for instance, had become the world’s largest supplier of dynamic random access memory (DRAM), static random access memory (SRAM), and thin- film transistor liquid crystal display (TFT–LCD) by the mid-1990s, only a decade after it advanced into semiconductor production. Taiwan Semiconductor Manufacturing Corporation (TSMC), founded in 1986, quickly became the world’s leading foundry plant and had grown into the world’s fourth largest semiconductor company in terms of market value by early 2000, next only to Intel, Texas Instruments (TI), and Applied Materials of the USA. 1 The successes of these latecomer firms indicate that, for the first time in postwar history, a group of once-developing countries have caught up with the industrialized economies. Up until the mid-1990s, most observers would have agreed that South Korea’s semiconductor industry was more successful and more promising than its counterpart in Taiwan. Indeed Taiwan had excelled in the markets for PCs and peripherals, but the heavy reliance on foreign original equipment manufacturing (OEM) orders kept it mainly as a low-cost manufacturing base in the global production system. By contrast, Korea has not only mastered sophisticated technology in quite a number of advanced memory chips, but it has also built up brand names such as Samsung, Hyundai, and Review of Development Economics, 5(2), 266–288, 2001 © Blackwell Publishers Ltd 2001, 108 Cowley Road, Oxford OX4 1JF, UK and 350 Main Street, Malden, MA 02148, USA...
View Full Document

This note was uploaded on 04/29/2010 for the course ECON 4450 taught by Professor Wan during the Spring '09 term at Cornell.

Page1 / 23

An-Chi Tung - Taiwan’s Semiconductor Industry What the...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online