Two of Taiwan's top semiconductor design firms rank among the top 10 in the world, according to IC Insights, a US-based chip-market research firm.
Via Technologies Inc (威盛), a designer of computer chipsets and central processors as well as optical equipment chips, ranked fourth worldwide in terms of net sales last year, and MediaTek Inc (聯發科技) , which designs microchips for use in CD and DVD recorders and players, took ninth place.
The ranking focuses on chip-design firms that do not own any chip plants, known fabs.
The most successful fabless design houses last year included the US firm Qualcomm Inc, a designer of chips for mobile phones, and Nvidia Corp, a graphics chip designer. These companies took the No. 1 and No. 2 spots, respectively, in a year when such companies faced a severe downturn in the semiconductor industry as a whole.
Overall, the chip industry dropped in value by 32 percent last year, yet the semiconductor-design segment suffered slightly less, falling 24 percent to US$12.89 billion from a record high US$16.93 billion in 2000.
The list highlighted the achievements Taiwanese chip design firms have worked so hard for over the past few years. Most design firms in Taiwan focus on making low-cost chips for products manufactured here or in China, and the lower costs help them gain market share, according to analysts. Taiwan's foundry chipmakers, such as Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and United Microelectronics Corp (UMC, 聯電), then provide the brawn behind the brains by actually making the chips.
The two chip foundries have been essential to Taiwan's chip-design industry, the second-largest in the world. The foundry model of manufacturing chips on a made-to-order basis saves chip-design firms the cost and trouble of building their own chip plants, which can cost between US$1 billion and US$3 billion, depending on the level of technology.
TSMC and UMC operate a range plants, from older six-inch wafer plants all the way up to the most advanced 12-inch plants that etch transistors into chips at near atomic levels.
Free from the burden of building costly chip plants, Taiwan's designers have focused on research. Some of the top firms in Taiwan, aside from Via and MediaTek, include Novatek Microelectronics (聯詠), a designer of chips for TFT-LCD screen panels, Sunplus Technology Co (凌揚科技), whose chips end up in high-tech toys and consumer electronics products and Realtek Semiconductor Corp (瑞昱半導體), a maker of telecommunications and networking chips.
The production value of the IC-design industry in Taiwan reached US$3.41 billion in 2001, up from US$3.29 billion in 2000, according to the Industrial Technology Information Service. This year, the government-run market research service expects the value to rise 24 percent to US$4.23 billion.
The government has promoted the development of system-on-chip products -- that integrate the functions of many chips onto a single unit -- in an effort to reduce costs and save space inside ever-smaller electronics gadgets.
IC Insights lists VIA Technologies as posting net sales of US$1.01 billion last year, while the company only reported sales of US$973.3 million. VIA would still retain its fourth-place ranking based on the company's sales figure.
The market researcher could not be reached for comment.
Of the 27 companies included in IC Insights overall ranking, all but eight were based in the US.
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