Hsinchu is home to the nation's two top-tier universities--National Chiao Tung University and National Tsing Hua University; a leading research institute--Industrial Technology Research Institute; and the first science-based park--Hsinchu Science Park. Both the NCTU and the NTHU are leaders in the fields of electrical engineering, computer science and management, having also established a healthy rivalry in terms of attaining research and development firsts. The ITRI, founded in 1973 by the Ministry of Economic Affairs, conducts research and development in applied technologies for use in the private sector. But according to HSP Administration Director-General Huang Der-ray, it was the establishment of the park that played a significant role in the history of Taiwan's breakneck-paced high-tech development.
Under the supervision of the Cabinet-level National Science Council--the nation's highest governmental agency responsible for promoting the development of science and technology--the three major science-based parks, including the HSP, the Central Taiwan Science Park and the Southern Taiwan Science Park, aim to improve industry structure and sustain economic prosperity. Located in northern, central and southern Taiwan respectively, each has differing features and functions. The HSP specializes in the semiconductor and information sectors, while the CTSP targets nanotechnology-based optoelectronics, aerospace technology and precision machinery. The STSP focuses on the optoelectronic industry.
The HSP, dubbed Taiwan's "Silicon Valley," is considered an engine room for the island's booming high-tech associated industries; interminably linked with many of the nation's--and the world's--leading high-tech enterprises in the areas of integrated circuits, computers and peripherals, telecommunications and biotechnology. Taiwan Semiconductor Manufacturing Co. Ltd., United Microelectronics Corp. and AU Optronics Corp all call HSP home. Moreover, MediaTek Inc, Acer Inc. and D-Link Corp. are also located inside the HSP.
"It's no coincidence that many of Taiwan's successful high-tech enterprises have become major players in their respective industries and now boast an international presence," Huang said, adding that the government used the HSP to engineer an economic transformation from the nation's original labor-intensive, low-value-added industries to knowledge-based, capital-intensive ones. "From the outset, [Taiwan's] high-tech sector required comprehensive support from the government, along with the creation of appropriate infrastructure and economy-oriented policy," he said.
The government's decision to invest heavily in the semiconductor sector's development has paid off handsomely, with both the world's No. 1 and No. 2 firms now operating on the island.
"TSMC is the world's largest dedicated semiconductor foundry and still uses the dedicated foundry business model it created in 1987," TSMC Deputy Spokesperson J.H. Tzeng said Nov. 30. Headed up by Morris Chang, the founder and chairman of TSMC, the company quickly grew into the market leader of the global foundry segment. "Our success relies on the trinity of strengths," Tzeng said. "Technology leadership, manufacturing excellence and customer partnership are our core competence." He added that the company simply focuses on manufacturing customers' product designs rather than turning out products under its own brand.
At present, TSMC operates two 12-inch, four eight-inch and one six-inch wafer fabs nationwide, with two overseas fabs in the United States and China. TSMC also has a joint investment fab with NXP Semiconductors in the city-state Singapore. Tzeng stressed that products made by the company have applications in a wide range of areas, including consumer electronics, computers and communications.
Last year, TSMC produced over 7.2 million eight-inch equivalent wafers, which translates to 8 percent of the worldwide IC wafer shipment. Moreover, the company generated US$9.76 billion in revenues (a 17.7-percent increase) as well as US$3.91 billion in net income (a 34.2-percent increase) in 2006, Tzeng stated.
"We have made several major technological and manufacturing accomplishments this year," Tzeng said. TSMC started mass production in 45-nanometer technology and has developed the foundry's first 32-nanometer technology that supports both analog and digital functionality. "Continuous investment in R&D is one of the factors that keep us abreast of local and foreign competitors around the world," Tzeng said.
In 2006, TSMC's R&D expenditure amounted to US$456 million, with the number of R&D staff increasing by 13.5 percent. In addition to allocating more funding to R&D this year, TSMC continues to be a market leader, accelerating the development of transistor, memory and interconnect technologies.
Similar to TSMC--a shining star enterprise based in the HSP--UMC is also a spin-off from the ITRI and was established in 1980 as the nation's first semiconductor company. With its cutting-edge foundry technologies, UMC manufactures advanced system-on-chip designs for applications in major sectors of the IC industry and has become the world's second-largest contract chipmaker in terms of market share. In 2006, the world's dedicated foundry market reached US$19.7 billion, in which UMC held 19 percent, while TSMC had 49 percent. Both companies have dominated the global marketplace and contribute greatly to the development of the semiconductor sector.
The rise of these two dominant semiconductor leaders has attracted a large number of fabless IC design companies to locate adjacent to TSMC and UMC for no other reason than convenience. Besides MediaTek, other noted HSP-based firms with IC design capacities--in revenue order--include Novatek Microelectronics, VIA Technologies, Sunplus Technology, Silicon Integrated Systems and Realtek Semiconductor. These six companies command more than 40 percent of sales in the domestic IC design sector and are situated within a five-minute drive of each other. The high density of these IC-related enterprises, as well as the integral industry chain from upstream to downstream in the science park, qualify Taiwan's 18-percent market share of the global IC design, second only to the United States' 73 percent and higher than South Korea's 4 percent.
Founded in 1997, MediaTek is the world's biggest supplier of silicon chips for DVD players and is a pioneer in technology system-on-chip solutions for wireless communications, high-definition digital televisions and optical storage. With revenues of US$1.73 billion last year, the company shipped over 80 percent of its mobile phone chips to China, competing with U.S.-based Texas Instrument Inc., the world's biggest phone chipmaker, as well as the German-based Infineon Technologies AG in the Chinese market, Taipei Times reported Nov. 2.
"Obviously the HSP is not only the cradle of Taiwan's semiconductor industry but also an important ingredient in the nation's economic prosperity," said Huang. Total sales generated by all of the enterprises in the park rose to US$34.5 billion in 2006 from US$30.8 billion in 2005: a 14.2-percent growth. He further pointed out that from September this year, over 123,600 employees served in 438 companies based in the HSP.
"In the future, we'll specifically focus on boosting two relatively new industries, biomedicine and digital content, which are full of lucrative potential and under evaluation," Huang said. "My goal is to build the HSP into one of the best science-based parks in the world."
Write to Allen Hsu at allenhsu@mail.gio.gov.tw