The Strategy of Taiwan IC Foundry for New Ecology - A Case Study of UMC

• Main Authors: Tsung-Hsi Ko, 柯宗羲
• Other Authors: Chyan Yang
• Format: Others
• Language: zh-TW
• Published: 2006
• Online Access: http://ndltd.ncl.edu.tw/handle/61488597001871543365

碩士 === 國立交通大學 === 管理學院高階主管管理碩士學程 === 94 === Under the strong lead by UMC and TSMC, the semiconductor industry in Taiwan has demonstrated the outstanding performance for the past consecutive years. This excellent performance is the great index of the government’s “Two Thousand Billion and Two Stars Projects” and contributes a lot to the country’s G.N.P. Taiwan’s success in semiconductor foundry business has inspired the worldwide elite semiconductor companies, such as IBM, Toshiba, Samsung, Chartered ..etc, to announce their intensive investment in this business. In addition, with the vigorous support by the government of People Republic of China (PRC) and with the advantages of same culture /same languages over other foreign companies, the young competitors SMIC and Grace in mainland China have also largely invested in this foundry business and claimed to achieve the world class level in a short time. They had completed 17 fabs (2 12-inch fabs, 8 8-inch fabs, 6 6-inch fabs, and 1 5-inch fab) by the end of year 2005 and the fab number is still increasing. Obviously, the driving force for building so many fabs in such short time for those companies is that they see the fact that mainland China is currently the strongest growing market in the world for semiconductor chips. The Compound Annual Growth Rate (CAGR) of semiconductor market in the country is estimated at 23.5% for the period of 2005 to 2009. In addition, the country’s semiconductor market is predicted to reach RMB 947.5 billions in production value by the end of 2009. Under this circumstance, the two Taiwanese foundry giants have encountered great challenges in different aspects. Firstly, the elite players in semiconductor manufacturing who are with the capability of advanced technologies join this foundry business by considering the reduction of the cost risk of fab construction and to increase the utilization capacity of their 12-inch fabs. Secondly, the newcomers in the field who own only low-end technologies acquire the foundry business by taking low-price strategy to penetrate the global market. The new faces in foundry service will provide some viable alternative sources (both advanced and mature technologies) to the Taiwanese leaders. Furthermore, the capitals of UMC and TSMC have reached NT$197.9 billion and NT$247.3 billion respectively already. With very limited resources and intensive competition, retain existing market, develop new market and make higher profits are urgent and immediate topics for the top management in UMC and TSMC. In this research, optimal management strategy for UMC foundry business development from the viewpoints of the transition of this business model is investigated and explored.