‘Red supply chain’ must be explored, experts say

Staff writer, with CNA

Mon, Nov 16, 2015 - Page 13

Facing an increasing threat from China’s emerging “red supply chain” — the fast-growing cluster of high-tech components cultivated by the Chinese government — Taiwan’s semiconductor industry must collaborate with Chinese companies to stay afloat, Taiwanese industry representatives said yesterday.

Taiwan Semiconductor Industry Association (TSIA, 台灣半導體協會) director-general Nicky Lu (盧超群) said that Taiwan should encourage the industry to strengthen product design, as well as talent development and retention, to improve its competitiveness.

Tien Wu (吳田玉), chief executive officer of Advanced Semiconductor Engineering Inc (ASE, 日月光半導體), the world’s largest integrated circuit packaging and testing firm, also said Taiwanese semiconductor manufacturers should adapt to the rise of the “red supply chain” by creating new values of their own.

Also, some industry representatives said that given the massive Chinese market, Taiwanese companies have no reason to give up the market.

If Taiwan’s industry players decline to collaborate with Chinese companies, they could be at risk of being marginalized when Chinese firms successfully cultivate their own supply chains for high-tech components.

Instead, if they work together with Chinese companies, Taiwanese firms might get the resources they need for their sustainable development, industry representatives said.

Chinese state-owned chip maker Tsinghua Unigroup (清華紫光) has reached a deal to acquire a 25 percent stake in Taiwan’s Powertech Technology (力成科技), becoming the Taiwanese chip packaging and testing company’s biggest shareholder.

Meanwhile, Tsinghua Unigroup Chairman Zhao Weiguo (趙偉國) said that if Taiwan’s government opens its doors wider, Tsinghua Unigroup would seek for its affiliates,to merge with MediaTek Inc (聯發科).