TSMC's Chang Comes Up With New Business Model for Cross-Strait Chip Industry

Taipei, Nov. 4, 2008 (CENS)--Morris Chang, chairman of foundry giant Taiwan Semiconductor Manufacturing Co. (TSMC), recently suggested the chip industry across the Taiwan Strait develop on the division of labor model of "design in mainland China and manufacturing in Taiwan."

The idea is completely counter-intuitive to the entrenched notion in Taiwanese that the two sides should develop on the model of Taiwan doing design whereas the mainland handling manufacturing.

Chang noted that the mainland is now the world's biggest market for semiconductor chips with a huge consumption of over US$35 billion worth of the devices every year, making it an ideal place for developing the design industry. He suggested that although there are hundreds of chip design houses in the mainland, the mainland authorities should assist a few of them in making their operations reach economy of scale as soon as possible.

He said chip manufacturing has developed very well in Taiwan and the mainland should contract Taiwanese foundries to make chips for them.