The close physical proximity of companies in Taiwan has led to the formation of industrial clusters that offer distinct advantages, making Taiwan an excellent one-stop shop for procurement, design support and rapid commercialization of product ideas.
The Economist Intelligence Unit (EIU), a renowned British think tank, last year announced the results of a global study of IT industry competitiveness. Based on the study, Taiwan's IT industry rose to second place from sixth place in the previous year out of a total of 66 nations included in the study. The report noted that Taiwan's rise in the rankings owed mainly to its strong performance in R&D, particularly regarding patented technology.
The Taiwan ICT industry has grown to a size that has resulted in substantial diversification, and many large companies have separated manufacturing units from branded operations in order to allow greater specialization in both of these areas.
One example of this is Acer Inc., which in the last five years has grown to become the world's third-largest PC maker by market share. The company no longer does manufacturing in house and spun off its production units into separate companies including Wistron Corporation. Wistron now does manufacturing for a wide range of companies including some of the best known brands in the notebook computer business. Many other companies in Taiwan are taking the same direction.
ASUSTek Computer Inc., owner of the ASUS brand, has become familiar to many around the world as the creator of the Eee PC, a small laptop computer with excellent internet connectivity that is affordable to a larger group of the world's people. ASUSTek last year spun off some of its manufacturing operations into a separate company called Pegatron Corp.
D-Link Corp., one of the world's largest network equipment companies, several years ago spun off its manufacturing arm as Alpha Networks Inc. and focused on building the D-Link brand.
To promote the Taiwan's industry, the government has made the development of branding the key task for raising the competitiveness of Taiwan's economy. There are two ultimate goals of the Branding Taiwan programme. The first is integrating resources to assist the establishment of brands and create a favourable environment for development. The second is to aid Taiwan enterprises in brand development and increase the value of Taiwan's international brands.
Taiwan companies are also among the world's leaders in products that save energy and reduce carbon emissions. These include companies making light- emitting diodes (LEDs) and solar cells, both of which were among the fastest growing segments in Taiwan's ICT industry last year.
Taiwan has the world's second largest LED industry with about a quarter of the world market. LEDs reduce energy consumption by emitting light from a chip rather than an incandescent filament in a light bulb or charged gases in a fluorescent light tube. LEDs use about a tenth of the energy of an incandescent bulb and can last a decade or longer. They also produce almost no heat, thereby reducing fire potential. LEDs are poised to take a larger portion of the multi-billion dollar market away from light bulbs and tubes as the new technology becomes more mature and manufacturing costs fall.
