It has been half a century since the semiconductor industry began in the 1970s. At first, semiconductors were just a supporting component developed by large corporations to enhance the functionality of their system products. However, the formation of the industry began with Intel in Silicon Valley.
Later, Intel and Microsoft jointly created a platform for the personal computer (PC) industry, which gave the semiconductor industry a big stage. Intel's microprocessors and the successive development of memory in the US, Japan, and Korea have all contributed to the gradual evolution of the industry.
After the launch of the iPhone in 2007, the two-way data transfer smartphone was another turning point. China's utilization of the domestic market allowed various smart applications to be deepened and optimized in the Chinese market, allowing eight Chinese cell phone brands to enter the global Top 10.
Along with the growth of the mobile phone industry, the red supply chain has been in the spotlight, and Taiwan manufacturers are on the edge of their seats. Semiconductors have become the last line of defense for Taiwan's technology industry. In the eyes of Western powers, Taiwan is a line of defense and could also be the caveat for China to break through the blockade.
I wrote my new book not to record heroic stories of industry leaders or make factual accounts of the industry, but to explore the inflection points of the industry.
How do we understand the concepts of the technology industry as it slowly evolves from a technology-led era to an application-driven era?
Evolution of the industry from PCs and cell phones to the Internet of Things
In the era of PCs and cell phones, brands determined the technical specifications, and the top-down decision-making process was technology-driven. In the Internet of Everything era, in addition to chips for high-performance computing (HPC) in data centers and memory for mass data storage, application-driven edge computing will lead to a trend of multi-track production and regional division of labor. Many enterprises would vie for local partners with the same core values for long-term cooperation when they migrate their supply chains.
We agree that the key trigger for the shift from globalization to de-globalization was the US-China trade war, and the change in the industrial ecosystem is also an important factor.
Wisdom from an ancient horse race - use the best talent to compete
Taiwan used to be a lonely and humble player in the semiconductor industry but started to attract global attention due to the chip crunch during the pandemic. Its rise to fame can be illustrated by Sun Tzu's "The Art of War," which states that "facing the rivals with a formal army and win the battle with surprise attacks" and that "when facing dire situations, stay alert like a crossbow that is ready to fire and stay agile like the swiftness of a crossbow bolt," which is the key to Taiwan's success over the past half-century of its development. We were fortunate, but we worked hard as well. I always say, "Don't rely on a sudden flash of good ideas." Only through long-term accumulation of knowledge and efforts will there be a chance to achieve surprising results.
Secondly, Taiwan is a small island with limited natural resources surrounded by powerful enemies. Taiwan's situation in geopolitics in the 1970s and 1980s was even worse than today, thus allowing Taiwan to turn the disadvantages of a dense population and scarce land resources into advantages for Taiwan's industrial development.
Leverage external forces and wait to act at the right moment
As we all know, the development of a country, society, enterprise, and even an individual depends on favorable conditions. The "form" that Sun Tzu talked about is the essence of the subject, and "the situation" is the external conditions that can both be substance and virtual. When a rock is floated by the torrent, it is the work of the external situation.
It means that even if one's essence is good enough, one still has to make good use of the external situation, grasp the right opportunity, and take action at the right moment, then one can naturally achieve something. The key to leveraging the ability of the water to float a rock is that there is a difference in speed, and the acceleration of force occurs because of the difference in speed.
The key to Taiwan's success in developing the semiconductor industry over the past half-century lies in the fact that it possessed certain conditions and developed its high-tech industries at the right time and in the right way. International developments were also favorable to Taiwan.
When Taiwan was building science parks, investing in research consortiums such as ITRI, and developing semiconductor clusters led by TSMC, China was only waking up from the Cultural Revolution. Taiwan's success is attributed to its efforts and the luck that many other countries did not have.
