Taiwan’s semiconductor industry has been making waves on the global stage, with the island nation leading the way in semiconductor foundry output. Companies like TSMC have almost monopolized the production of 3-nanometer process AI chips, solidifying Taiwan’s position as a crucial hub in the global high-tech supply chain.
At a recent “North America Taiwan Startups Day – NextGen AI” forum held at Stanford University, Yao-Hung Yang, the President of the North American Taiwanese Engineers Association and Managing Director of the semiconductor equipment company Applied Materials, shared insights on the success of Taiwan’s high-tech industry in an interview with Epoch Times.
In the 20th century, during World War I and World War II, money, gold, and capital were paramount. Switzerland, as a neutral country, became a global haven for wealth protection, with capitalists and asset holders willing to deposit money in Swiss accounts. Fast forward to today’s high-tech era, technologies like edge computing, artificial intelligence, cloud services, and blockchain are driving global trends, where intellectual property plays a central role.
Yang emphasized that intellectual property is now more critical than money and gold. Therefore, for high-tech companies, finding the right partners and commercializing intellectual property to become market leaders are crucial. Taiwan’s industrial model and business philosophy have positioned the country as a preferred partner for high-tech companies.
While most countries like China, South Korea, and Japan adopt a centralized vertical integration model for industrial development, Taiwan, primarily driven by small and medium-sized enterprises, follows a decentralized approach.
Yang noted that small and medium-sized enterprises have always been a source of pride for Taiwan, facing relative weakness against large corporations. However, through strategies like the “Second Place Philosophy” proposed by Morris Chang and the OEM model, Taiwan has found its place in the global high-tech market.
The “Second Place Philosophy” refers to Taiwan’s willingness to collaborate with other companies, aligning with Taiwan’s decentralized industrial model. For instance, Taiwan focuses solely on chip foundry services, avoiding vertical integration across design, simulation, product manufacturing, and sales. This approach alleviates concerns for international high-tech companies regarding patent and intellectual property risks.
Yang highlighted that Taiwan’s industrial model is exceptional globally, without the traditional upstream, midstream, and downstream processes, mitigating the risk of leaks. Taiwan’s focus is not on producing entire products but concentrating on specific segments. Just as people found security in depositing funds in Switzerland in the past, entrusting high-tech product manufacturing to Taiwan now ensures safety, as Taiwan does not engage in intellectual property theft, mitigating the risk of patent replication for foreign companies. He stated, “Taiwan brings peace of mind.”
Taiwanese companies strive to offer superior, faster, flawless, and cost-effective services, proactively helping customers reduce costs and preemptively resolving issues before customers even realize them, ensuring utmost satisfaction upon receiving products.
Taiwanese people exhibit a strong sense of responsibility. Yang shared an anecdote about his dentist telling him, “Your dental problems are my problems.” He noted that modern Taiwanese enterprises uphold a similar attitude, viewing all product issues as their responsibility.
This high level of responsibility is rare, even in the United States. In the U.S., there are two types of scenarios – leaving on time or staying until the project is completed. Taiwan, on the other hand, combines both, going above and beyond during work hours and even addressing work-related issues after hours. Yang marveled, “Where else in the world can you find such individuals?” He lamented, “Taiwan today is like the old Switzerland, a rarity in other parts of the world.”