Is the economy going downhill? How will Taiwan respond? These were questions my co-host of a program on IC Broadcasting asked during a recent episode. She noted that countries had lowered their economic growth forecasts, and that China's economic growth was slowing down and inflation was severe. I replied that the decentralized production system is taking shape, local value is rising, and this is the best time to increase investment and improve the domestic application environment.
Every once in a while there will be a test of economic development - this is the norm. In this industry, we all understand one thing: The only thing that remains unchanged is that there're always constant changes. The question is whether you have the ability or means to respond to changes in the environment. Or do you have the courage to face the changes?
Who would have envisioned that Taiwan's electronics industry that started with PCs would evolve into a massive economic power with revenues of 800 publicly traded companies expected to exceed US$1 trillion by 2022?
The Asian financial turmoil in 1997 brought about a reshuffle and Taiwan's computer industry stood out in the tough times when the world was on edge. In the wake of the 2008 financial tsunami, Samsung Electronics managed to extend its lead with 36% and 24% in capex growth for two consecutive years, while other memory companies suffered. TSMC also managed to race ahead in the foundry sector..
TSMC and Samsung are the best examples of making bold moves during a crisis when other lesser companies are on tenterhooks. I am more like what Morris Chang describes a "learning curve believer." As long as they are the leaders, they will invest more and wide the gap when everyone else is unable to counterattack. TSMC's position today is a result of the increased investments since 2009. TSMC has thrown down the gauntlet. Who dares to take up the challenge?
In the 1990s, the unbeatable Intel almost dominated the global market. Who would have envisioned that today it would contract TSMC for 5nm and 3nm chip manufacturing? It's not easy to overtake others. A better option is to find another way by integrating software with future car integration. Still, it won't be easy.
During recession it may take a longer time to see returns from investment. But if you are indispensable, you may be the biggest winner in the recession, or the recession will be the best opportunity to expand the gap of leadership. The best solution to a problem is always to have a healthy business and a firm commitment.
