BusinessWeek Magazine: Why Taiwan Matters

May 25, 2005

In a focus section entitled "Why Taiwan Matters," the U.S.-based BusinessWeek magazine noted that the main reasons why the position of Taiwan and the issue of relations between Taiwan and mainland China matter to the world is the solid strength of the island's computer and information technology (IT) industries. Just 10 years ago this most profitable sector of Taiwan's electronics industry played only a small role; today, however, Taiwan's original design manufacturing (ODM) standards are rising by the day and many of its products command a very high share of the global market. For example, Taiwan is the world's leading supplier of IC chips, with a market share of 70% and an annual production value of US$8.9 billion. Taiwan is also the world's top supplier of laptop computers, with a market share of 72% and a production value of US$22 billion; of liquid crystal displays, with a market share of 68% and a production value of US$14 billion; and of personal digital assistants, with a market share of 79% and a production value of US$1.8 billion. The island is the second-largest supplier of computer servers, with a market share of 33% and a production value of US$1.8 billion, and of digital cameras, with a market share of 34% and a production value of US$2 billion. It is also the world's biggest supplier of modems.

The main competitive advantages of Taiwan's industries derive from their strong adaptive ability, their culture of risk-taking in entrepreneurship, their skill at innovation and design, and their flexibility in satisfying the demands of their customers. Another factor in the island's competitive advantage is effective participation by the government. For example, the government-supported Industrial Technology Research Institute boasts 4,300 engineers who cooperate closely with the corporate sector in working to enhance technological skills in such areas as microelectronics, optoelectronics, and other fields so that Taiwan will be able to contend with the West, Japan, and Korea.

China also plays a major role in the achievements of Taiwan's electronics industry. Today it is a common practice to design and develop products in Taiwan and then manufacture them in Chinese factories. It is estimated that 40-80% of China's exports of communications and information technology exports are manufactured in Taiwanese-owned factories. The number of Taiwan citizens working in China is no less than 1 million; their management know-how and marketing skills have spread throughout China's manufacturing industries, and are now reaching into other parts of the world.

For more information from this special section of BusinessWeek, please refer to its issue dated May 16, 2005.

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