Former Industrial Technology Research Institute President Chintay Shih, with nearly three decades of service in the state-sponsored institute, was a major player in the collective effort to build Taiwan’s semiconductor industry from scratch.
It is only appropriate for the veteran to tell the story of how Taiwan was able to emerge as a global high-tech powerhouse, starting with a visionary project 34 years ago.
In the early 1970s, a series of political and economic setbacks prompted the government of Taiwan to consider re-engineering the country’s economic structure. To pave the way for the transformation, then Minister of Economic Affairs Sun Yun-suan helped create the ITRI in 1973. One year later, after internal consultations within the government and discussions with Pan Wen-yuan, an ROC expatriate leading a research team at the U.S.-based Radio Corporation of America, Sun made the call to embark on a four-year, US$10 million integrated circuit development project.
Meanwhile, Shih had just graduated from Princeton University with a doctorate in electrical engineering. Working for a computer company in San Diego in 1975, the young engineer learned about the government’s undertaking, and made the decision of a lifetime to take part in this new venture. “But frankly speaking, I really had no idea what was waiting for me in Taiwan. I only knew that serving the country was the right thing to do,” Shih said.
With Sun taking charge and arrangements facilitated by Pan, the ITRI signed the “CMOS IC Technology Transfer Licensing Agreement” with RCA March 5, 1976, under which RCA would transfer its know-how in complementary metal-oxide semiconductor technology to Taiwan.
“I reported for duty at ITRI just a few days before it signed the deal with RCA,” Shih recalled. As part of the agreement, in April 1976 the institute sent 19 young engineers to RCA’s facilities for training in IC design, process technology, IC testing and semiconductor equipment. Later on more engineers went on the same pilgrimage to become Taiwan’s industry pioneers.
Shih was the leader of the process technology team. Other trainees included Bob Tsao, emeritus chairman of Taiwan’s first foundry, United Microelectronics Corp.; Tsai Ming-kai, chairman of the nation’s leading IC design house, MediaTek Inc.; and F.C. Tseng, vice chairman of Taiwan Semiconductor Manufacturing Co., the world’s largest contract chip maker.
“As an engineer, I knew very well that my mission was to absorb as much of RCA’s technology as I could and try to convert its manufacturing processes into a set of standard operating procedures that would work for Taiwan,” Shih said.
While these seed engineers were undergoing on-the-job training in the U.S., the ITRI was building Taiwan’s first 3-inch wafer fabrication plant, which began its pilot run at the end of 1977. Shih became the first plant manager after returning to Taiwan that year. He called the plant “the origin of the country’s semiconductor industry.”
“We were able to reach mass production within a very short period of time, and in a few years our fab was running at a higher yield than RCA’s plants,” Shih said. This was no surprise, since the ITRI facility was run by the very best of Taiwan’s engineers, he explained.
With the IC plant getting into stride, Shih was promoted to head of the ITRI’s IC development center, then to deputy director and later director of the Electronics Research and Service Organization, where he served throughout the 1980s. It was at these posts that Shih, along with his colleagues, made several critical decisions that profoundly influenced the development of Taiwan’s high-tech industries.
The spinoff of the ITRI IC plant became United Microelectronics Corp. in 1981, Taiwan’s first semiconductor company. In 1986 Shih joined then ITRI President Morris Chang in negotiating a partnership with the Netherlands’ Royal Philip Electronics that culminated in the establishment of TSMC in 1987. TSMC pioneered the business model of dedicated foundry manufacturing and ultimately reshuffled the global semiconductor industry.
Starting with foundries, Taiwan has built a semiconductor supply chain complete with IC design, wafer fabrication and IC packaging and testing. According to the Semiconductor Industry Promotion Office of the MOEA’s Industrial Development Bureau, the output of Taiwan’s semiconductor sector amounted to NT$1.229 trillion (US$39 billion) in 2009, when the country ranked No. 1 in the world in IC manufacturing, packaging and testing, and No. 2 in IC design in terms of global market share.
Thanks to the solid IC foundation, as well as the many skilled professionals the ITRI cultivated during Shih’s term as its president, Taiwan was able to develop its dynamic random-access memory and thin-film-transistor liquid crystal display panel industries, which have been dubbed the “twin engines” driving the country’s economic growth for the past decade. “The RCA project changed Taiwan’s economic landscape fundamentally,” Shih noted.
While the move to develop the IC industry was the right decision at the right time, reflecting the foresight of the government, “a forward-thinking policy alone is not enough to make everything else fall into place,” Shih pointed out. While he was interning at RCA’s plant in Findlay, Ohio, a group of engineers from Brazil was there under a similar arrangement. “The Brazilian government also had the vision, but its project failed because the country did not have the necessary conditions in place,” Shih said.
“In contrast, a number of critical factors were at play to allow Taiwan’s efforts to pay off,” he explained. These included sound government policies, an ample supply of talent and an encouraging business environment, especially with the creation of the Hsinchu Science Park in 1980. “Taiwan’s performance in these aspects was exceptional, and that made all the difference.”
Now head of the Institute for Information Industry, Shih is coordinating the government’s efforts to bring Taiwan’s information and communications technologies to the next level, including development of the cloud computing sector. As a seasoned veteran in the nation’s economic development, he offered his views on the controversial question of whether Taiwan’s high-tech sectors should be allowed to invest outside the country, especially in mainland China.
“We should not be afraid of opening up to the world,” he stressed. “I have always believed that innovation, integrity and sharing are the three pillars sustaining the ITRI, and that we should adopt the same liberal approach and encourage our businesses to fully develop their potential, whenever and wherever they have the chance,” Shih said. Local firms’ experience in developing overseas markets will provide positive feedback to Taiwan. “This will benefit the country in the long run,” he concluded. (THN)
Write to Meg Chang at meg.chang@mail.gio.gov.tw