21st Century Manufacturing The Role of the Manufacturing Extension Partnership Program (2013) / Chapter Skim
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Appendix A3: Taiwan's Industrial Technology Research Institute: A Cradle of Future Industries
Appendix A3: Taiwan's Industrial Technology Research Institute: A Cradle of Future Industries
Pages 285-336
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From page 285... ...
ITRI "has played an integral role in transforming Taiwan's economy from a low-tech, labor-intensive model to a high-tech, knowledge-based industrial core."1 ITRI's formation was the most important aspect of a broad national effort to develop Taiwan's semiconductor industry, a spectacular success which has subsequently driven the growth of Taiwan's capabilities in computers, lighting, displays, telecommunications, photovoltaics, and machinery. ITRI is located in one of the most successful technology "clusters" in the world, grouped in and around Hsinchu Science Park (HSP)
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From page 286... ...
In 2007, the Geneva-based World Economic Forum ranked Taiwan in first place worldwide in industrial clustering competitiveness, a distinction "attributed mainly to the effect of the world-renowned Hsinchu Science Park." "Taiwan Ranks 1st Place in Industrial-Clustering Competitiveness Worldwide: WEF," Taiwan Economic News (December 26, 2007)
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Similarly, Li, the founder of Hsinchu Science Park, is credited with transforming Taiwan from an agrarian country to a high technology center. "Fred Terman, the Father of Silicon Valley," Net Valley (October 21, 2010)
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is formally responsible for formulating the country's science and technology policy, and ITRI is subordinated to the Ministry of Economic Affairs, strategic direction has determined through a consultation process involving foreign experts and ethnic Chinese with relevant experience in multinational companies: "a distinctive feature of Taiwan's technology policy making is the extensive participation of overseas technologists, mostly of ethnic Chinese origins, as advisers. Enjoying a varying level of access to the top policy circle, they help policymakers identify the industrial sectors with technological promise, 12 Constance Squires Meaney, "Taiwan's Semiconductor Industry,": in Joel D
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The Technical Advisory Committee (TAC) , originally an informal group of expatriate Taiwanese engineers working in the United States, evolved into a standing organization of Taiwanese with international education and work experience advising ITRI on relationships with multinational corporations.
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(Ding-Yuan) Yang," recorded February 23, 2011 (Computer History Museum)
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. In 1990, new laboratories were established for computer and communications research and biomedical engineering.23 Currently, ITRI's R&D activities are centered on six core laboratories pursuing "deeper and new" ideas and eight technology centers which focus on particular themes emphasizing a multidisciplinary approach and drawing on the specialized competencies of the core laboratories.
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From page 292... ...
In recent decades the research capabilities of Taiwan's universities, including the Hsinchu-based National Tsing Hua and National Chiao Tung Universities, have emerged as increasingly important sources of technology. As ITRI's reputation as an R&D powerhouse has grown, it has become possible for the institute to enter into joint R&D projects with first-tier foreign companies and research organizations.
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; "ITRI Signs MoU with LBNL on Renewable Energy Technology Development," Taiwan Economic News (August 11, 2011) ; "Corning Inaugurates Research Center in Taiwan," Asia Pulse (March 13, 2006)
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Solar Industry Award, the first Asian laboratory to achieve this honor, for development of a "green energy antenna." This device "integrates antenna transmission and solar panel power storage technology, simultaneously improving the conversion efficiency of solar energy optoelectronics and the efficiency of antenna reception and emission." ITRI has reportedly secured international patent rights for the technology and is seeking "international cooperation partners for technology transfer." According to estimates, application of the new technology at a 3-G base station with power consumption of 500W could product about 30 percent supplementary power mitigating peak hour power consumption and relieving the load on the power grid. Lillian Lin, "ITRI's Green Energy Atenna Technology Wins Solar Industry Award" Central News Agency (September 7, 2011)
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Oscar Wu and Mai Huang, "ITR Wins Prominent Display Technology Award from Industry Group," Central News Agency (May 19, 2011)
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The centers seek to establish capabilities for the integrated production of advanced technologies by fostering the creation of an entire industry supply chain. The technology centers coordinate and integrate research and technology obtained from various ITRI core laboratories, foreign partners, and Taiwanese industry.
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It is currently partnering with local Taiwanese companies to establish the foundation for a complete industrial chain for the manufacture of flexible electronics products.34 DTC Director Chen observes that the multidisciplinary approach to R&D practiced in ITRI's technology centers is the key to the launch of new industries: The biggest strength of ITRI is the multidisciplinary cooperation. We create a complete manufacturing supply chain in its early stages.
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In addition, it offers professional measurement, inspection and certification services to help companies address technical obstacles in world markets. 40 "ITRI Puts Up 111 Patents for Sale," Taiwan Economic News (May 18, 2006)
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ITIC was established because at the time Taiwan lacked a venture capital industry. ITIC provided capital to a number of Taiwanese companies that were spun off by ITRI, including United Microelectronics Corporation (UMC)
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Lithium battery modules 2001 Phison Electronics Corp. Flash memory 2004 DelPoint Solar cells SOURCE: "Taiwan to Roll Out High-Speed Spindles for High End Machines Tools," Taiwan Economic News (November 21, 2005)
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Phison had 12 employees when it entered the Incubation Center in August 2000 and 60 when it left in January 2003.48 A key milestone in Phison's history was the formation of a close relationship with Toshiba, which invested in Phison, provided a source of demand for its USB flash drives and assisted the company in securing patents and fending off legal challenges.49 Initially Toshiba had no idea who or what Phison consisted of, so ITRI made a presentation to Toshiba introducing the company. On the basis of the presentation and ITRI's established high technology bona fides, Toshiba decided to invest in the company, becoming its largest shareholder.50 THE HSINCHU TECHNOLOGY CLUSTER ITRI's contribution to Taiwan's industrial development has been substantially enhanced by its physical presence in a technology cluster in the Hsinchu area.
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The semiconductor industry was dominant in terms of percent of total revenue.54 In addition, many small technology companies are located just outside the HSP itself and contribute to the cluster effect. At present HSP receives around 1,000 visiting missions per year seeking to understand how such a technological-industrial complex can be established and managed.55 The Hsinchu technology cluster has been extensively studied by academics and by other countries and regions seeking to replicate its success.
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Knowledge spillovers: As Marshall expressed it, in an industrial district the "secrets of trade are in the air," and presence in the cluster enables firms to access market intelligence, new designs and new applications.58 All of these factors are present in abundance in the Hsinchu technology cluster and are critical elements in its success. Supplier Linkages Hsinchu Science Park has greatly facilitated the development of Marshall's "supplier linkages" by encouraging technology-intensive firms to locate in proximity with each other.
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From page 304... ...
The presence of materials, design, equipment, fabrication, and testing companies in the park is cited as a major locational and competitive advantage by semiconductor industry executives.61 Skilled Labor The second element of Marshall's trinity, pool of skilled labor, is available to companies operating in HSP thanks in substantial part to the presence of two research universities adjacent to the park.62 National Chiao TABLE APP-A3-5 Hinschu Park Industry Supply Chain for Semiconductors Sector Number of Companies in HSP Wafer fabrication 17 Fabless design 129 Equipment 17 Lead frame 3 Wafers 6 Test 3 Mask 5 EDA design tools 5 Michigan, October 16-17, 2009)
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1013. 69 "Taiwanese Researchers Make Nanotechnology Breakthrough," Central News Agency (August 18, 2011)
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28. 71 A TSMC executive has observed that "engineers in the Hsinchu Science Park not only work very hard, but they share the same backgrounds.
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pp. 1008-12 75 Hsinchu Science Park Annual Report (2010)
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A longstanding talent shortage has been exacerbated by an exodus of skilled workers to mainland China. And the American connection, long an important aspect of Taiwan's high tech development, may fade as the number of Taiwanese students pursuing advanced degrees in the U.S.
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An executive at AU Optronics, a major producer of flat panel displays, said in a 2005 interview that his industry needed about 5,500 additional skilled workers per year, but that available talent equaled only about 70 percent of that total. Top universities like National Taiwan University, National Tsing Hua University and National Chiao Tung University between them were turning out 3-4,000 graduates per year and "cannot meet market demand."78 A 2005 ITRI study found that the country's semiconductor industry would need 37,500 new skilled workers over the next three years but that the island's educational system could supply only 21,800 during that time frame.79 ITRI itself has been affected by the talent drain.
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T-J. Chen, "The Emergence of Hsinchu Science Park as an IT Cluster," in S
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I think that gave the Taiwan industry a very good opportunity." Interview with Jonney Shih, "Taiwanese IT Pioneers: Jonney (Chang-tang) Shih," recorded February 15, 2011 (Computer History Museum, 2011)
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Individual SBIR grants can be up to amounts of $340,000.93 Taiwan's SBIR program has come under considerable domestic criticism for being overly bureaucratic.94 Intellectual Property Protection A major challenge confronting Taiwan's high tech industries is the increasingly widespread phenomena of patent litigation used as a business strategy to block new industry entrants.95 The Economist reporting on an infringement action by Apple against HTC, a Taiwanese maker of smartphones, commented in December 2011 that -- 92 "SME Loans to Taiwan Hist 5 Year High of NT $4.05 Trillion as of October 2011," Taiwan Economic News (December 29, 2011)
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. 100 "Alliance Formed to Help ICT Firms with Patent Issues," Taiwan Economic News (August 19, 2009)
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. In 2009, ITRI and the Taipei Computer Association announced the formation of an "information industry mutual-benefit patent alliance" to create "a large depot of patents for domestic information and communication technology, to help companies to plan patent strategies and to secure the "assistance of experts in patent-infringement law." "Alliance Formed to Help ICT Firms With Patent Issues," Taiwan Economic News (August 19, 2009)
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to LCD displays and then to the computer business." Interview with Chun-yen Chang, "Taiwanese IT Pioneers: Chun-yen Chang," recorded February 16, 2011 (Computer History Museum, 2011)
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(Ding-Yuan) Yang," recorded February 23, 2011 (Computer History Museum, 2011)
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(Ding-Yuan) Yang, recorded February 23, 2011 (Computer History Museum, 2011)
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Even in the semiconductor industry, it would be almost a waste of their great talents to use them on manufacturing alone. Therefore, it was natural that the yield rate was high.118 industrial chain and these were the subject of subsequent ITRI initiatives.
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167. 122 Interview with Chintay Shi, "Taiwanese IT Pioneers: Chintay Shih," recorded February 21, 2011 (Computer History Museum, 2011)
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. 127 "Oral History of Morris Chang," recorded August 24, 2007 (Computer History Museum, 2011)
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, 1983. Semiconductor Manufacturing Corporation (TSMC)
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Philips' IP umbrella, based on a web of 130 Interview with Robert Tsao, "Taiwanese IT Pioneers; Robert H.C. Taso," recorded February 17, 2011 (Computer History Museum)
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A large number of expatriate Taiwanese "engineers-turnedentrepreneurs returned from Silicon Valley to drive this process forward.136 Winbond and Vanguard Winbond Electronics Corporation was formed in 1987 to produce semiconductors memory devices. Most of its original personnel came from ERSO, which also supplied the company with licensed technology.137 Winbond has subsequently become Taiwan's largest maker of branded integrated circuits.138 Subsequently "a new company started almost every year, and many 134 Interview with Chintay Shih, "Taiwanese IT Pioneers: Chintay Shih," recorded February 21, 2011 (Computer History Museum, 2011)
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169. 142 Chang, "Emergence of Hsinchu Science Park" (2008)
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chips, which have applications in portable medical electronic equipment, aerospace and internet-related products, with the objective of developing product prototypes. "BMC Cooperates With ERSO to Develop MRAM Products," Taiwan Economic News (March 21, 2002)
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software, and to promote the development of a domestic IC design industry.147 Taiwan's Emerging Competitive Edge By 2007, Taiwan's semiconductor industry led the world in a number of key technology areas including foundry manufacturing and testing. Taiwan had more state-of-the-art 12 inch wafer fabrication facilities than any other country in the world, 11 fabs.148 An ITRI official declared in 2007 that Taiwan's semiconductor industry ranked "first in the world in competitiveness, with no other countries expected to rival it over the next few years."149 TABLE APP-A3-8 Taiwan's Competitive Position in Semiconductors, 2007.
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firm's 3D-1C design on a pilot line.154 In 2010, ITRI was reportedly working with a team of "dozens" at National Tsing Hua University to develop architecture for a high-density 3dimensional nonvolatile resistive random access memory (RRAM) device that would consume less power and yield higher speeds than existing memory chips.155 In late 2011, ITRI exhibited a prototype high speed non-volatile RRAM which it had developed.
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In 2004, ITRI spun off a solar cell company, DelPoint, a joint venture with Delta Electronics, which received technology, capital and staff from ITRI.163 The following year Delta began production of solar cells, and a large number of Taiwanese entered the solar cell companies business, some of which "[stole] talents from the government-backed Industrial Technology Research Institute (ITRI)
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In 2006, ITRI opened the PV Technology Center.166 ITRI-trained scientists and engineers have played an important role in the development of Taiwan's solar TABLE APP-A3-9 Creating the PV Supply Chain Materials Cells Modules Systems Hsinchu Science Park WW Corp Gintech Gintech Delta SAS DelSolar DelSolar Neo Solar Central Taiwan Science Park Setek AUO AUO AUO SR Solar BMC Delta Delta Nextpower Nextpower Southern Taiwan Science Park Motech Motech Delta Delta E-Ton Nanowin SOURCE: Dr. Weileun Fang, National Tsing Hua University, Applications of Micro Tech for Renewable Energy at Taiwan: Progress and Prospects (2011)
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local technology levels and assist … industries to expand their global market share in the wake of surging demand for green and clean energy."168 In January 2010, ITRI spinoff TSMC acquired a 20 percent stake in Motech Industries, Taiwan's largest maker of solar cells, for $196 million.169 Taiwan's semiconductor manufacturers, including two ITRI spinoffs, are playing a significant role in the development of Taiwan's thin film solar cell industry, a technology area holding great promise for solar power generation.170 In 2008, a UMC subsidiary, NextPower Technology Inc., was the first Taiwanese firm to begin volume production of thin film solar cells. 171 In 2010, TSMC began construction of a $258 million Thin Film Solar R&D Center and fab in Central Taiwan Science Park.172 Concurrently TSMC acquired a $50 million equity stake in California-based Stion, a start-up conducting R&D in CIG5 technology.173 ITRI has worked with several Taiwanese universities to develop modification in the thin-film PV CIGS manufacturing process that do not utilize toxic selenide.174 Taiwan's MOEA has formed the CIGS Alliance, an ITRI technology-diffusion alliance which includes a number of small TF companies as well as large firms like TSMC and AU Optronics.175 By 2011, Taiwan's solar cell industry ranked number two worldwide by production value ($4.3 billion)
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. 181 "ITRI Advices Using Strengths in ICT for Biotech Industry," Taipei Times (July 22, 2008)
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, which was split in 2006 to form the Biomedical Engineering Research Laboratories (BEL) and the Medical Electronics and Device Technology Center (MED)
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440. 189 "DailyCare's Handheld ECG Penetrates Japan's Medical Device Market," Taiwan Economic News (May 15, 2007)
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"ITRI Develops Wide Beam Angle LED Bulb." Central News Agency (January 31, 2012)
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Its technology integration centers perform an internal interdisciplinary silo-breaking function which in its later stages is passed along to the private sector in the form of complete industry supply chains developed in ITRI-led industry alliances and research projects. The physical proximity of researchers, labs and companies in the Hsinchu technology cluster fosters continual knowledge spillovers from the research community to private companies.
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Today it increasingly recruits graduates from domestic universities with strong and improving programs in engineering and the sciences. The competitiveness of the industries in the Hsinchu technology cluster "derives from the availability of a significant pool of well-trained workers and technical and managerial personnel [from ITRI and Hsinchu's two science-based universities]
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