By Ma Shuping, Research Team on “The Development of Integrated Circuit Industry”, Enterprise Research Institute

Research report Special Issue No. 41, 2017 (Total 1565) 2017-10-10

Abstract: The integrated circuit (IC) industry in China’s Taiwan province started development from scratch and gradually became one of the frontrunners and catch-up economies in the world. Its experience indicates that in the initial stage, the government played the guiding role because the private capital was reluctant to make investment in this sector due to its tangible disadvantage as a later comer. Later when the private capital became inclined to make input in this sector, the local authority timely transformed its role by shifting onto fleshing out business environment and giving full play to the market. It shows that with the support of effective industrial policies, it is possible for technology-intensive industries to overcome the late-comers’ disadvantage and successfully catch up with the leading industries. The relevant enlightenments drawn from Taiwan’s experience reveal that efforts need to be made to overcome late-comers’ disadvantage to push forward industrial upgrading; the local government plays a different role in different industrial development periods; the local government needs to create favorable conditions for industrial development tailored to its characteristics; research institutes on applied technology are effective carriers of technical transfer; the fostering of innovative enterprises is the foundation for industrial development; and the formulation and implementation of policies call for able figures.

Key words: integrated circuit (IC), policy, China’s Taiwan province