Branching Out and Growing Suppliers: What Taiwan’s Software Industry Still Lacks

TSMC is back at 1,000. I previously wrote on Facebook about a process of ‘branching out’ in Taiwan’s electronics and technology industry. That process helped it flourish and achieve a substantial position in the world. Similarly, discussions of Silicon Valley’s thriving startup scene often mention the continual branching of companies and organizations such as PayPal and YC. San Ai Electronics → Kinpo, Compal, Inventec, Quanta Acer → Wistron, ASUS, Pegatron, Qisda, AUO At the venture capital association’s 40th-anniversary conference, Trend Micro CEO Eva Chen, a panelist, said that she had also worked at Acer. A substantial proportion of today’s Taiwanese electronics and technology professionals probably are, or once were, members of the major groups mentioned above. Taiwan’s semiconductor and electronics industries have another development process: ‘large companies helping smaller ones grow.’ TSMC is in a league of its own not only in Taiwan, but also in global semiconductor manufacturing. Another side of the story, however, is how TSMC has elevated Taiwan’s semiconductor supply chain. Apart from IC design, TSMC has helped build Taiwan’s semiconductor manufacturing capabilities in equipment, materials, and related areas. To do business with TSMC, you have to be among the world’s leading companies. It helps you improve step by step, and you follow it around the world. Here is the key point: Taiwan’s software industry lacks this process of ‘branching out’ and ‘large companies helping smaller ones grow.’ ---- Some schools and organizations have also been important forces behind the scenes. Just as we often cite Stanford as an entrepreneurial university, Taiwan has institutions such as ITRI and Taipei Tech. ITRI not only incubated TSMC and UMC but also nurtured many founders and leaders of Taiwan’s exchange-listed and OTC-listed companies. Taipei Tech’s predecessor, Taipei Institute of Technology, was likewise a cradle for these business owners. The semiconductor and electronics industries have also benefited from talent trained at science and engineering universities such as National Taiwan University, National Tsing Hua University, National Chiao Tung University, and National Cheng Kung University.