Matéria interessante que saiu na nova The Economist.!
IT in Taiwan and China
Taiwan’s tech firms are conquering the world—and turning Chinese
May 27th 2010 | From The Economist print edition
WHICH is the world’s most important technology trade show? Gadget freaks will insist on CES in Las Vegas. Old hands are likely to pick CeBIT in Hanover, Germany. But the cognoscenti argue that nowadays Computex in Taipei, which celebrates its 30th anniversary next week, rules the roost.
Taiwan is now the home of many of the world’s largest makers of computers and associated hardware. Its firms produce more than 50% of all chips, nearly 70% of computer displays and more than 90% of all portable computers. The most successful are no longer huge but little-known contract manufacturers, such as Quanta or Hon Hai, in the news this week because of workers’ suicides (see article). Acer, for example, surpassed Dell last year to become the world’s second-biggest maker of personal computers. HTC, which started out making smart-phones for big Western brands, is now launching prominent products of its own.
Much of the credit for the growth of Taiwan’s information technology (IT) industry goes to the state, notably the Industrial Technology Research Institute (ITRI). Founded in 1973, ITRI did not just import technology and invest in R&D, but also trained engineers and spawned start-ups: thus Taiwan Semiconductor Manufacturing Company (TSMC), now the world’s biggest chip “foundry”, was born. ITRI also developed prototypes of computers and handed the blueprints to private firms.
Taiwan’s history also helps make it the “best place in the world to turn ideas into physical form,” says Derek Lidow of iSuppli, a market-research firm. Japan colonised the island for half a century, leaving a good education system. Amid the turmoil of the Kuomintang’s retreat to Taiwan from mainland China, engineering was encouraged as a useful and politically uncontroversial discipline. Meanwhile, strong geopolitical ties with America helped foster educational and commercial links too. Western tech firms set up shop in Taiwan in the 1960s, increasing the pool of skilled workers and suppliers.
Today Hsinchu Science and Industrial Park, the hub of Taiwan’s IT industry, is home to about 400 high-tech companies, chief among them TSMC with its huge “fabs”. Bigger than aeroplane hangars, these can cost more than $10 billion a pop and churn out three billion chips a year. Dozens of “fabless” chip firms, in turn, provide the designs. The most successful is MediaTek, whose chips power most of the mobile phones made in China.
Computex includes stands where Acer and Asustek, another local computer-maker, display their latest wares. But it is not so much an IT exhibition as a mall for computer parts. Memory chips, motherboards, disk drives, fans, connectors, casings: each component has its own neighbourhood of booths. The heart of the Taiwanese IT industry is a network of hundreds of small specialised firms that make these things, overnight if need be.
This strength, however, is also Taiwan’s weakness. Most firms are junior partners in the world’s IT supply chains, making things others have developed. They are good at incremental innovation, mostly related to manufacturing (firms from only three other countries have filed more patents in America than Taiwanese ones over the past decade). But many of them are stuck in a “commodity trap”, cautions Dieter Ernst of the East-West Centre, a think-tank in Honolulu. Profit margins, he says, are razor-thin and do not allow adequate investment in R&D and branding. The Taiwanese industry is particularly weak where the most valuable intellectual property is created these days: in software, services and systems. As a result, Taiwan has a huge deficit in technological trade. Its firms are often sued by Western ones for patent infringements. In March, for instance, Apple filed a complaint against HTC.
What is more, under pressure from their customers, Taiwanese computer-makers have moved most of their production to cheaper countries, mainly China. Yet China is becoming a force in its own right in high-tech innovation and is itself fostering IT giants, such as the Semiconductor Manufacturing International Corporation (SMIC), another foundry.
But Taiwan is adapting. ITRI now puts more emphasis on intellectual property, services and design, says Johnsee Lee, its president. It applies for five patents a day on average and licenses them mostly to local firms, not least so they can use them as currency to negotiate settlements in lawsuits. It has started a “Creativity Lab” where engineers work alongside artists, writers and psychologists to come up with more than just new hardware.
The big Taiwanese companies are improving the quality of their patent filings, says Shin-Horng Chen of the Chung-Hua Institution for Economic Research, and launching infringement suits of their own, as HTC has done. Some are trying to move up the value chain or into new markets. Acer and HTC are trying to become global brands. TSMC is said to have ambitions in solar panels and light-emitting diodes. Taiwanese firms have also proved that they can adapt existing technology cleverly to come up with new products. Asustek, for example, pioneered netbooks (no-frills laptops); Acer’s success rests in part on innovative distribution.
When it comes to IT, at least, relations with China are improving. The Chinese government has recruited Taiwanese firms to help it set technical standards. Taiwan, for its part, recently eased restrictions on outbound investments, which it had imposed to limit the transfer of technology to China. TSMC, for instance, has been allowed to take an 8% stake in SMIC.
It is hard to see China dethroning Taiwan as manager of the world’s electronics factories soon, says Peter Sher of the National Chi Nan University. But the IT industry in the two countries will increasingly become intertwined, predicts Mr Ernst. “Especially in IT, Taiwan is becoming more and more part of the Chinese economy,” he says. Indeed, some tech types already fuse the pair into “Chaiwan”.