Intel CEO tells Taiwan to focus efforts on R&D

Taiwan needs to focus on building up its education infrastructure and internal research and development capabilities and let its manufacturing industry move to China, Intel CEO Craig Barrett said during a panel discussion on Taiwan's high tech future held yesterday at the Grand Hyatt Taipei.

"Taiwan is undergoing a transformation today that the US underwent 10 years ago ... Taiwan will transform from a country that has been involved in the manufacture of low cost computer components to a country creating higher value-added products," Barrett said.

To meet this future, Barrett urged the government to stop worrying about how to keep the manufacturing sector in Taiwan and begin building a better education system, capable of turning out more engineers. The loss of the manufacturing sector is inevitable, he said.

Over the next decade, Taiwan's manufacturing sector will migrate to China and elsewhere, while Taiwanese firms upgrade to work on more value-added intellectual property such as product and systems design, software creation and telecommunications and networking equipment, Barrett said.

In turn, the Intel CEO said in 10 years, China would begin to lose its manufacturing sector to a third location after expenses build up to the point it makes sense to move to India or another third country.

Acer Inc (宏電) Chairman Stan Shih (施振榮), who was part of the panel discussion, took the opportunity to talk about the computer maker's reform efforts -- separating its manufacturing business from its Acer brand name operations. Acer is moving upstream to deliver more value in technology and services, he said.

The company announced its restructuring last January, and since that time has spun off its manufacturing business into a separate company dubbed the Wistron Corp (緯創資通). As one of the founders of Taiwan's computer industry, Shih hopes to pioneer the way into a future where manufacturing is done in China and marketing from company headquarters in Taiwan.