Green Silicon Island: Return Lustre to Its Halo

Green Silicon Island: Return Lustre to Its Halo
China Times editorial (Taipei, Taiwan, ROC)
A Translation
August 26, 2012

Summary: This newspaper has launched an editorial series entitled, "The Dust-covered Silicon Island." It investigates the diminishing competitiveness of Taiwan's technology industry. Taiwan's high-tech industries are ill. The illness appears serious. The good news is Taiwan's high-tech industries have a solid foundation. It still has assets. It still has advantages in technology and management. It can still make a comeback.

Full Text below:

This newspaper has launched an editorial series entitled, "The Dust-covered Silicon Island." It investigates the diminishing competitiveness of Taiwan's technology industry. Taiwan's high-tech industries are ill. The illness appears serious. The good news is Taiwan's high-tech industries have a solid foundation. It still has assets. It still has advantages in technology and management. It can still make a comeback.

Consider the overall figures. Prior to July, exports from Taiwan declined 5.8%. Taiwan's main export technology products come from the ICT industry, which declined as much as 23.3%. During the same period, exports from neighboring countries remained positive. This was especially true of our competitor South Korea, whose export products largely overlap those from Taiwan. Consider individual industries. These once played an important role in Taiwan's PC industry chain. The DRAM industry was once dominated by South Korea, the U.S., and Japan. It is now dominated exclusively by South Korea. Others have closed their doors. They are receiving government subsidies and bleeding red ink. Their technology lags behind South Korea by more than two generations. Their prospects for survival are slim. In the manufacture of LCD panels, other economies have fallen behind South Korea. They are steadily losing money. Chimei and AU Optronics lost nearly 500 billion dollars during the first half of this year. Their prospects are grim. Other industries, such as the PC, LED, and solar energy industries, all face crises and challenges. Semiconductor are the sole exception, Taiwan's high-tech industries are in trouble. That is no exaggeration.

Leave aside short term factors for the moment, such as the global economic downturn. Manufacturers on Taiwan face three challenges. One. Industry trends have changed dramatically. Manufacturers have not been able to respond in a timely manner. Over the past three decades, high-tech industries on Taiwan have developed within the WINTEL (Microsoft plus Intel) framework. But in 2010, the Apple iPad made its US debut. This shook the industry. The PC industry entered the Post-PC Era. The technology industry on Taiwan depends primarily on PCs. It is at a complete loss what to do. It has plummeted to new lows.

Two. South Korean companies learned a hard lesson over the past decade. Past investments, technological advances, and brand building have finally paid off. They are finally reaping what they sowed. Taiwan meanwhile, has been routed. In fact, it lost to a single company -- South Korea's Samsung. Taiwan's DRAM industry has been trounced. Taiwan's share of the DRAM market is in the single digit range. Samsung alone has nearly half the world market. Taiwan's LCD industry is in crisis. In the high tech, high profits AMOLED industry, Samsung has a 97% market share. In the smart phone industry, Samsung has surpassed Apple in market share. The market share of Taiwan's HTC continues to drop. The latest figures show that even on Taiwan Samsung cell phones outsell HTC.

Three. Others are gaining. Mainland manufacturers are catching up. Their technology still lags behind Taiwan's. But the threat increases by the day. Flat panels from Taiwan account for half of the Mainland market. The Mainland is Taiwan's most important market. But Mainland flat panel manufacturers have begun operation. Taiwan manufacturers will inevitably be subject to heavy pressure. Mainland smartphone manufacturers such as Huawei, ZTE, Coolpad have debuted. HTC and other Taiwan-based companies face increased competition. Never mind the PC industry. Lenovo has already surpassed Taiwan's Acer and Asus.

Can the technology industry be rebooted? The government must dramatically liberalize its rules and regulations. It must reduce its myriad controls. We can cite many examples of crippling government controls. For example, the flat panel industry was subject to undue government restrictions. As a result it lost the lead on the Mainland. Mainland companies were able to rise. Even South Korean companies obtained approval for the construction of two flat panel factories. As a result Taiwan plants found themselves facing greater competitive pressure. Had the government allowed mergers and acquisitions, and granted greater latitude and encouragement, Taiwan's DRAM manufacturers could have merged long ago. Their situation today would be very different.

Research and development on Taiwan require more farsighted planning and more ambitious targets. South Korea's Samsung invested 250 billion NT on R&D in one year alone. Taiwan companies cannot compare. The National Science Council invests no more than 90 billion on R&D per year. Its subsidies are too egalitarian. This all needs to be improved. The government should also provide a variety of business opportunities in medical cloud computing, educational cloud computing, and 4G.

Brand building is not the only way. But as MIT scholar Lester Thurow said when he visited Taiwan several years ago, the key to Taiwan's competitiveness is innovation. There is no other way. Domestic businesses are good at being followers. They are unwilling to make long-term investments. They are unwilling to create their own core technology and core competitiveness. As a result they eventually find themselves in a sea of red ink. Businesses must consider this.

The Green Silicon Island is covered with a layer of dust. Taiwan's high-tech industries have deep roots. Hundreds of thousands of energetic small and medium enterprises have cooperated with medium and large enterprises to establish a competitive supply chain. As long they have a direction, as long as the government and enterprises cooperate, they will once again see the light of day. As National Science Council Chairman Chu Ching-yi said, we may be in the midst of a crisis, but we need not despair. Let the government and business join forces and restore lustre to the Silicon Island halo.

重新擦亮綠色矽島的光環
    2012-08-26    中國時報

　本報日前推出「蒙塵的矽島」系列專題，探討台灣科技產業競爭力衰退問題，台灣科技產業真的病了，而且似乎病得不輕；但值得慶幸的是：台灣科技產業底子厚、家當還在，同時也還保有技術與管理的優勢，未來仍有重振機會。

　從總體數字看，台灣前七月的出口衰退了五．八％，但台灣出口主力的科技產品─資通訊產業，衰退幅度卻高達二三．三％；同期鄰近國家─尤其是出口產品與台灣高度重疊、競爭的韓國，其出口仍維持正成長。再從個別產業面看，曾在 台灣ＰＣ產業鏈中占有重要地位、與韓、美、日共分天下的ＤＲＡＭ產業，算是被韓國徹底打垮，倒閉、紓困、繼續承受嚴重虧損者都有，在技術已落後韓國二個世代以上後，未來生機渺茫。此外，ＬＣＤ面板在技術落後韓廠、廠商虧損累累下，奇美加上友達，今年上半年就虧損了近五百億元，前景亦讓人憂心。其它如ＰＣ、ＬＥＤ、太陽能…等，幾乎都面臨程度不等的危機與挑戰。除了半導體外，說台灣科技產業全面陷入困境，應不是過份的形容。

　撇開全球經濟低迷的短期因素不談，今日台灣廠商面臨的壓力與挑戰來自三方面，第一是產業趨勢丕變，廠商應變不及。過去三十年，台灣科技產業在「WINTEL」（英特爾加上微軟）的架構下發展；但二○一○年，美國蘋果的iPad橫空出世，撼動業界，ＰＣ產業推入「後ＰＣ時代」，台灣以ＰＣ為主軸的科技產業完全亂了手腳，陷入空前的低潮。

　第二則是韓國企業經過十年的生聚教訓，過去累積的投資、技術的進步、品牌的營造，在這幾年開花結果，進入收割期，台灣幾乎全面潰敗，而且，某個觀點而言，竟敗在韓國三星一家廠商手上。ＤＲＡＭ已敗，台灣的ＤＲＡＭ市佔率剩下個位數，三星一家就席捲近半數江山；ＬＣＤ陷入危機，技術先進、利潤高的AMOLED技術，三星市占率九七％。智慧型手機方面，三星超越蘋果的市占率，但台灣的ＨＴＣ市占率則腰斬下滑，最新的數字是連在台灣，ＨＴＣ手機都賣輸三星。

　第三是後有追兵，大陸的廠商已迎頭趕上，雖然技術仍落後台廠，但威脅日重。台灣面板在大陸占有一半的市場，大陸是台廠最重要的市場，但大陸本土的面板廠商已開始投產，未來台廠的壓力必然沈重。大陸本土的智慧型手機廠如華為、中興、酷派等也興起，ＨＴＣ等台灣業者面對的競爭壓力會逐漸增加，更不用提在ＰＣ領域，聯想已經超越台灣的雙Ａ。

　重振科技產業，就政府而言，首先就該在法令與制度上持續作更大幅度的開放、減少現有的許多管制。我們可以舉出許多政府不當管制，甚至因此延誤企業發展與商機的例子。例如，面板因政府不當限制，失去在大陸搶先機的機會，讓大陸本土企業興起，連韓國廠商也拿下兩張面板廠的核准，台廠因而面對更大的競爭壓力。政府如能對企業併購更友善、給予更多空間與鼓勵，ＤＲＡＭ廠可能早就自己合併，不會走到今日田地。

　台灣對研發的投入，也該有計劃、有目標的拉高。韓國三星一家廠商一年的研發經費就超過二千五百億台幣，台灣企業無人能及；連我們政府國科會每年編列補助的研發經費，也不過九百多億，而且分配又太過於「齊頭平等主義」，這些都有必要改進。此外，政府也該主導釋出各種商機，如醫療雲、教育雲、４Ｇ等。

　品牌固然不是唯一的路，但正如ＭＩＴ學者梭羅幾年前訪台說的：「台灣競爭力的關鍵還是要靠創新，沒有他途」國內企業善於當追隨者、不願長期投資、經營自己的核心技術與競爭力，最後都落入紅海中；企業對此應有所省思。

　綠色矽島蒙塵，台灣科技產業根基深厚，數十萬拚勁十足的中小企業，配合中大型企業，架構出完整而有競爭力的供應鏈，只要有方向、政府與企業齊心努力，必然有重現光芒之日；正如國科會主委朱敬一說的：雖有危機，但不悲觀。讓政府與企業齊心再擦亮矽島的光環吧！