Abstract
The purpose of this paper is to discuss and examine how two Taiwanese firms–TSMC and UMC–who compete in the highly dynamic global semiconductor industry, are able to use their unique strategies to create a new wafer foundry sector. The birth of foundry business gave rise to the vertical disintegration of the IC industry. As the foundry industry evolved along its life cycle of embryonic, growth to shake-out stage, the focus of the foundry business migrated from manufacturing-centric to technology-centric and now to customer-centric. Various strategies were adopted at each stage by the incumbents to cope with the changes in the industry environment to sustain business growth.
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