Taiwan’s semiconductor sector is playing an increasingly important global role, and the government is trying to develop the nation into an advanced semiconductor manufacturing hub.
Not only does the government want to form a complete chip ecosystem, it also wants to strengthen Taiwan’s international integration and make the nation an indispensable international partner.
The responsibility for this task will undoubtedly fall on the Hsinchu Science Park, which is already a globally important chipmaking cluster with a production value of more than US$1 trillion, accounting for 5 percent of Taiwan’s GDP.
The park’s development is the lifeline of Taiwan’s economy, so what will shape its future? Obviously, talent and technology.
In terms of innovation, the industry’s momentum is normally assessed by the share of research-and-development (R&D) expenditure.
R&D expenditure in the park was about NT$195.5 billion (US$6.97 billion) in 2019, accounting for 10.9 percent of revenue, Ministry of Science and Technology and IC Insights data showed.
This is better than Taiwan’s overall average. Although the park’s figure is lagging behind the sector’s global average, the production value of Taiwan’s chip sector is first in the world. If this trend continues, Taiwan would catch up with the global standard.
In addition, there are more than 580 factories in the park, employing more than 150,000 people. Retaining talent, recruiting new talent and raising the technology level is closely related to urban governance.
People working in the park care about transportation, drinking water, garbage management, recreation and overall urban aesthetics. All these issues involve joint management by the Hsinchu city and county governments. Before the park can be expanded, the two local governments would have to work together to expand roads leading to the park.
Hsinchu city and county are governed separately, which often leads to difficulties in policy integration. A merger and the elevation of Greater Hsinchu to a special municipality would not only improve the efficiency of governance, it would to also benefit the economic development of the area and Taiwan in general.
Creating an efficient local government and a quality urban living environment is the only way to retain talent.
This is the core concept for upgrading Greater Hsinchu to a special municipality directly under the central government and an important step in strengthening the Hsinchu Science Park.
Lee Shun-fa is an associate professor in Tamkang University’s Department of Industrial Economics.
Translated by Perry Svensson
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