The local chip-design industry may grow by 24 percent to US$4.23 billion this year, spurred on by government plans to increase funding for research and incentives, officials said yesterday.
"Taiwan is already the second-largest IC design center behind the US, but we need to upgrade to a more integrated, value-added business model," said Hwang Tai-yang (
The sector had 3.5 percent growth last year, reaching US$3.41 billion, according to the Industrial Technology Information Service, under the Ministry of Economic Affairs. Chip design was the only portion of Taiwan's semiconductor sector to grow last year, the worst year in the history of the industry.
As part of the government's "green, silicon island" initiative, officials plan to aid the industry with up to US$1 billion (NT$34 billion) in new funding as well as providing space in the Nankang software park in suburban Taipei. The park was specifically set aside for developers of system-on-a-chip (SOC) semiconductors.
"The trend is to embed more functions onto a single chip," said Eric Chen (
The process can reduce costs and save space for PC manufacurers such as VIA Technologies Inc (
"Taiwan is creating independent IC-design capabilities and developing SOC for Internet and consumer-related products," Hwang said.
A major initiative over the last few years has been to entice foreign companies into building R&D centers in Taiwan, he said.
Another has been to promote international standards at home and abroad in order to make sure chips made in Taiwan can be used in products everywhere.
"Last year there were over 200 IC-design houses here. This year there will be over 300. With more companies, the output will increase as will revenue, so ... this [24 percent growth] figure is quite reasonable," Chen said.
There are more pure chip-design firms in Taiwan than anywhere else in the world -- save the US. In Japan, most design teams work as part of a larger corporation which also manufactures and sells chips, or uses them exclusively for their own products.
In the US and Taiwan, many companies focus entirely on design, and leave manufacturing to foundry chipmakers.
"The business model is different in Taiwan and Japan and South Korea. Why? Because of culture. Taiwanese people like being the boss. So this business model -- the IC design house -- will continue to grow not only in Taiwan, but also in China," Chen said.
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