Taiwan's Semiconductor Industry Research Articles

Assessing sustainable supply chain transparency practices in Taiwan semiconductor industry: A hierarchical interdependence approach.

This study contributes both theoretical and practical perspectives by providing sufficient resolution for detecting sustainable supply chain transparency structures, particularly when transparency has stretched beyond current supply chain operation, which involves various uncertain and complex factors. Sustainable supply chain transparency is established to enhance the disclosure and visibility of sustainability information within and outside the supply chain. However, the complexity and uncertainty of accessing supply chain information make such assessments challenging. This study integrates the balanced scorecard as the theoretical foundation in addition to the technical perspective for a performance model, employing a hybrid of the fuzzy Delphi method, a fuzzy decision-making trial and evaluation laboratory, an analytic network process and Choquet Integral. The analysis aims to identify valid sustainable supply chain transparency attributes, examine causal relationships, assess hierarchical interdependencies, and indicate priority practices for Taiwan's semiconductor industry. The findings reveal six aspects and 20 indicators as a valid hierarchical structure, with causal aspects such as stakeholder efforts, information processing and analytics, and digital capability. The crucial managerial implications that focus on production and logistics processes, government regulation, safety and data security include connectivity and data confidentiality. The prioritizing practices of disclosure, traceability, and visibility are indicated to improve sustainable supply chain transparency in the industry.

On the tailor-made water governance mechanism for Taiwan's semiconductor industry

This study explores a new governance mechanism aimed at regional integration and explains how this mechanism can achieve optimal governance of water resources through the division of labour in politics and the economy. This study adopts political economic geography as the research approach. The data used in the analysis were obtained from official documents, interviews and field investigations, and its authenticity was interactively checked via triangulation. The results show that ‘spatial shifts’ were the driving force behind water redistribution. The division of labour between politics and the economy eliminates obstacles to water distribution through the mutual adjustment and division of underground rhizomes; ‘creative destruction’ and ‘destructive creation’ are alternately used to achieve dialectical progress. This study concludes that in this case, the process of regional integration simultaneously generates circular mechanisms in which political power and economic productivity are consolidated.

The contagion and spillover effects of stock returns between quasi-vertically integrated firms in Taiwan semiconductor industry

<p>The study intends to investigate whether there are contagion effects resulting from supply-chain stock returns interaction and spillover effects deriving from returns volatility causation in quasi- vertically integrated Taiwan semiconductor industry. 17 paired groups (34 companies) of parent and subsidiary companies were found. The unit root test, LB-Q test, ARCH tests, Bi-GARCH model, parametric t test and nonparametric sign test, ranked sign test and Kruskal-Wallis test are applied. The major findings are as follows: Positive stock returns contagion effect exist in both parent-to-subsidiary and subsidiary-to-parent. Stock returns volatility spillover main and minor effects exist in quasi-vertically integrated supply chain. In general, the contagion effect and volatility spillover effect of parent-to-subsidiary are greater than those of subsidiary-to-parent.</p> <p> </p>

The US-China Semiconductor Power-Security Dilemma: Decoupling the Security and Power Struggles Through the Theory of Dr. Barry Buzan

Increasingly, both China and the US frame the secure domestic supply of semiconductors as a national security issue. Yet it is difficult to differentiate between the securitization of semiconductors as a national security vulnerability or as an arena for geopolitical competition. This article leverages Barry Buzan's theory of the power-security dilemma to provide a framework for deciphering and decoupling the two countries’ efforts to reduce their semiconductor supply-chain vulnerabilities and related power struggle. First, the US's and China's supply-chain vulnerabilities are explored as a security struggle, with special attention paid to their dependencies on Taiwan's semiconductor industry. Second, recent American efforts to restrict the flow of semiconductor technologies to China are explored as a power struggle. This article concludes by using Buzan's theory to draw conclusions about the origins and potential evolution of the US-China semiconductor power-security dilemma.

Territory and Function: Planning Reform and the Ecological Security of the Semiconductor Industry in Taiwan

Territory and Function: Planning Reform and the Ecological Security of the Semiconductor Industry in Taiwan

Stuck in the Middle: Taiwan's Semiconductor Industry, the U.S.-China Tech Fight, and Cross-Strait Stability

The Trump administration has worked to restrict the People's Republic of China's ability to manufacture and acquire semiconductor chips since 2018. Caught in the crossfire of this burgeoning tech war is Taiwan, which is home to Taiwan Semiconductor Manufacturing Company (TSMC), the world's largest semiconductor chip manufacturer. With the United States banning companies that use U.S. technology in their chip manufacturing process from doing business with Huawei, TSMC can no longer do business with the Chinese tech company, one of its most important clients. Until the Trump administration announced the license restriction on Huawei, TSMC had managed to walk the fine line of doing business with both China and the United States, without riling either. This article argues that the TSMC example is indicative of how great power competition between the two countries will play out for the foreseeable future. TSMC has announced that it will build a new factory in Arizona as it faces Chinese firms poaching its employees and Chinese actors hacking its systems and code for trade secrets—all actions demonstrating how great power competition will play out for tech dominance. Avoiding direct live-fire conflict, China and the United States will work to restrict the other's actions and development by forcing important tech companies, such as TSMC, into picking a side.

The Ambidextrous Influence of Network Flexibility on Alliance Formations

The purpose of this study is to provide evidence on the impact of network flexibility and its ambidextrous influence on a firm’s exploratory and exploitative partnership selection. We develop our hypotheses based on the literature of network flexibility and draw on a sample of publicly listed firms in Taiwan semiconductor and optoelectronics industries. Data are collected from survey questionnaires and archival sources and examine our hypotheses by using the generalized linear model (GLM) approach. Our empirical findings show that configuration flexibility has a greater influence on exploratory partnerships, while manufacturing flexibility has a greater impact on exploitative partnerships. In addition, when firms are ambidextrous (i.e., have both types of flexibility), they are able to simultaneously obtain both exploratory and exploitative partnerships.

The differentiated and ambidextrous influence of network flexibility on exploratory and exploitative partnership formations

PurposeThe purpose of this study is to provide evidence on the impact of network flexibility and its ambidextrous influence on a firm's exploratory and exploitative partnership selection.Design/methodology/approachThe authors develop our hypotheses based on the literature of network flexibility and draw on a sample of publicly listed firms in Taiwan semiconductor and optoelectronics industries. The authors collect our data from survey questionnaires and archival sources and examine our hypotheses by using the generalized linear model (GLM) approach.FindingsThe authors’ empirical findings show that configuration flexibility has a greater influence on exploratory partnerships, while manufacturing flexibility has a greater impact on exploitative partnerships. In addition, when firms are ambidextrous (i.e. have both types of flexibility), they are able to simultaneously obtain both exploratory and exploitative partnerships. The authors’ findings indicate that balancing network flexibility is critical when firms execute ambidextrous alliance strategies.Research limitations/implicationsThe authors’ use of survey data to measure network flexibility may limit our observations related to network evolution. In addition, the authors’ use of public annual reports to capture firm partnerships may cause us to ignore informal relationships between partners.Practical implicationsThe authors’ empirical findings suggest that the types of partnerships firms develop depend on which types of flexibility they possess. The results further suggest that decision makers have to find a way to develop a balanced strategy between network configuration and manufacturing flexibility when they would like to develop an ambidextrous alliance strategy.Originality/valueThe authors’ study advances the understanding in the literature on supply chain flexibility and its ambidexterity by connecting network flexibility and ambidextrous alliance strategy. The authors offer a guide to supply chain managers in the area of network design.

The Influence of R&D Intensity on Financial Performance: The Mediating Role of Human Capital in the Semiconductor Industry in Taiwan

Knowledge transfer is a strategy used by high-tech companies to acquire new knowledge and skills. Knowledge can be internally generated or externally sourced. The access to external knowledge is a quick fix, but the risks associated with reliance on external sources are often overlooked. However, not acquiring such knowledge is even riskier. There have been a slew of litigations in the semiconductor industry in recent years. The acquisition and assurance of intangible assets is an important issue. This paper posits that internal R&D should take into consideration the knowledge intensity and capital investment in the industry. This study focuses on the relationship between intangible assets and financial performance. It sourced the 2004 to 2016 financial data of semiconductor companies in Taiwan for panel data modeling and examined case studies for empirical validation. This study found that the higher the R&D intensity (RDI) in the value-added component of human capital, the better the financial performance of the company. RDI has a positive influence on the accumulation of human capital and financial performance metrics, and such influence is deferred. Meanwhile, human capital is a mediating factor in the relationship between RDI and financial performance. RDI is integral to the semiconductor industry’s pursuit of business sustainability.

An Economy-Wide Assessment of Artificial Intelligence Investment on Manufacturing: A Case Study of Taiwan’s Semiconductor and ICT Industries

With the rapid development of digital computing capabilities, the emergence of Internet of Things (IoT), cloud and big data analytics, Artificial Intelligence (AI) has become an important innovative tool for digital transformation and technological upgrading of global manufacturing. In this paper, using dynamic Computable General Equilibrium (CGE) model of MONASH-type and Taiwan’s input-output tables to capture the supply-chain interdependence and resource constraints, we present the economy-wide assessment of government policies and private companies’ investment in smart manufacturing, as well as the impact on the output and employment of Taiwan semiconductor and ICT industry. Simulation results show that, under increasing AI investment, semiconductor output will be 10.34% higher than the baseline, and employment demand will be 24.61% lower than the baseline in 2025. The result is similar on the ICT industry as well. The development of smart manufacturing is an adaptation strategy for private enterprises to cope with declining birthrate, labor shortage, and improving production yield and efficiency. At the same time, the unemployment and the uneven income distribution may be the side effect while developing the AI on manufacturing. It is suggested that in addition to focusing on AI talent cultivation and the establishment of the infrastructures, the government may also adopt fiscal and tax policies to improve the income distribution and strengthen the labor transfer.

The R&D efficiency of the Taiwanese semiconductor industry

The aim of the study is to explore the Research and Design (R&D) efficiency of the semiconductor industry in Taiwan from a patent perspective. Six evaluation indices are selected as inputs (total assets, staff numbers, and R&D expenditure) and outputs (return on assets (ROA), earnings per share (EPS), and patent number), and then the 4-year annual data of the listed 42 semiconductor companies of the semiconductor industry in Taiwan are obtained. The Data Envelopment Analysis (DEA) is utilized for the efficiency computation among 42 semiconductor companies. Based on the research results, recommendations for semiconductor companies and suggestions for future studies are provided.

Potential Benefit of Carbon Benchmarking: Analysis of Semiconductor Industry in Taiwan

The main purpose of this study is to explore the carbon reduction environmental benefits that can be achieved if carbon benchmarking is applied when semiconductor manufacturers in Taiwan work to improve the technical efficiency of their carbon reduction efforts. The evaluation method used is as follows. First, a technical efficiency measurement method that is capable of considering both desirable outputs and undesirable outputs is used to measure the technical efficiency of the carbon reduction efforts and identify the benchmark firms with the best technical efficiency. Next, an attempt is made to estimate the greenhouse gas reduction that is realized by the sample if their carbon reduction efforts are accompanied by the implementation of a benchmarking system. Finally, the monetary value of the greenhouse gas reduction is estimated so as to develop a better understanding of the carbon reduction benefits for the adoption of the process outlined above. The empirical results show that using carbon benchmarking to raise the technical efficiency of carbon reduction management would, on average, boost the annual sales revenue of each decision-making unit by about US$486.6 million, while also bringing up the average annual CO2 reduction benefits per decision-making unit by US$11.11 million per year.

State transformation and the evolution of economic nationalism in the East Asian developmental state: the Taiwanese semiconductor industry as case study

This paper empirically highlights the role of nationalism in the development of the semiconductor industry in Taiwan. First, it demonstrates how the pre‐1980s Taiwanese developmental state mobilised Chinese economic nationalism against Japanese colonialism and Chinese communism and adopted the strategies of graduated sovereignty, selectively subsidising certain areas and sectors, and promoting national (homogeneously imagined) territorialisation to integrate with the international market. Second, the paper exhibits how in the late 1980s, when the outflow of capital to Mainland China became a compelling phenomenon and Taiwan democratised, popular sovereignty became the norm and Taiwanese nationalism emerged. In response, the democratised state started employing Taiwanese economic nationalism and implementing populist territorial policies to consolidate the support of ‘us’ (the Taiwanese/Taiwan) versus ‘them’ (the Chinese/China). This made China and everything related a security concern that had to be excluded as ‘the other’. This paper responds to the appeals of political geographers to give nationalism a central place in contemporary theories of the nation‐state and contributes to the theory of the developmental state by bringing ‘the nation’ back. While most of the existing developmental state literature focuses on how the roles and effects of ‘the state’ influence economic development, taking ‘the nation’ seriously can provide more accurate explanations for how and why the state focuses on development or not. Accordingly, through valuing the nation this paper promotes a theory of the developmental nation‐state.

On an IC wire bonding machine production–inventory problem with time value of money

The semiconductor industry in Taiwan has received excellent performance ratings in the past. SinoPac’s statistics in January, 2016 found that two of the top four global packaging and testing companies are from Taiwan, including ASE Group and SPIL. In the IC packaging process, the wire bonding machine requires careful attention. It is also costly at approximately 50% of the equipment investment. Thus, this paper focuses on wire bonding machines’ production problems. According to the on-site interviews, three key control modules are identified, which may change a machine to an out-of-control state and are responsible for 90% of the defective products. A mathematical model is developed to determine the optimal production time of an imperfect production process. Taking the time value of money, the objective is to minimise the total of the set-up cost, inventory cost and the defect cost. Besides applying MacLaurin Series, a math property and an effective solution range are derived to help obtain near-optimal solutions. For the justification of solution quality, the bisection method working on practical data is used. Finally, managerial insights are explored from observed outputs through the changes of various parameters. Moreover, these explorations are confirmed by experts in this field.

Using the balanced scorecard in assessing the impact of BI system usage on organizational performance

There is currently a trend towards the integration of business intelligence (BI) systems with existing information systems in order to improve decision-making capabilities in organizations. Even though much attention has been paid to the factors influencing the adoption of BI systems, in practice there is still limited research investigating the business value of BI systems in a post-adoption environment. The motivation for this study is to examine the impact of BI system usage on organizational performance. This study develops a multidimensional measurement for assessing organizational performance, based on the balanced scorecard (BSC) approach developed by Kaplan and Norton. Data for the study were collected from 139 companies in the semiconductor industry in Taiwan and the relationships proposed in the framework were tested using Partial Least Squares method. The results indicate that higher levels of BI system usage will lead to improved financial performance indirectly through enhanced internal process, learning and growth and customer performance (non-financial performance). Moreover, higher levels of BI system usage can also lead to improved internal process, customer, and learning and growth performance in organizations. The results also show that internal process and customer performance have positive significant impact on financial performance. While learning and growth does not directly lead to the improvement of financial performance, it indirectly influences financial performance through the mediating effect of internal process performance. The findings of this study provide initial evidence that the adoption of BI systems leads to increased financial performance. The results indicate that these four BSC performance measures for BI system usage are interrelated, supporting the core premise of the BSC.

Institutional support, innovation capabilities and exports: Evidence from the semiconductor industry in Taiwan

This paper examines the relationship between host-site institutional support, innovation capabilities and exports using data from a survey of 50 Taiwan semiconductor firms. The major questions asked in the paper are whether host-site institutional support is important in stimulating firm-level innovation capability, and whether the latter is important in firms' exports. An evolutionary perspective was used to measure innovation capabilities using knowledge embodied in machinery, training, processes and products. The statistical results show that innovation capability is correlated with institutional support. In addition, the findings also indicate that innovation capabilities (IC) enjoy a positive relationship with exports. The control variable of size had a positive effect in innovation capabilities and in exports, while human capital was critical in exports. The supply of R&D grants, R&D engineers and scientists, and support from universities and R&D labs has been viewed by firms as important in supporting innovation capability and semiconductor exports.

Constructing an Evaluation Model to Assess the Supply Chain Management System in the Taiwan Semiconductor Industry

Abstract This study presents an evaluation model that can be used to select a supply chain management system (SCMS) related to the semiconductor industry, thereby enabling administrators or decision makers to identify the most appropriate system to be implemented or reimplemented. The analytic network process based decision-making method for constructing an evaluation method can provide decision makers in the semiconductor industry or business administrators with a valuable reference for evaluating the SCMS, helping to identify the most appropriate system for either implementing or reimplementing the SCMS. Furthermore, the proposed model can assist entrepreneurs in assessing the SCMS, indicating that the model is highly applicable for academic and commercial purposes.

We Have Never Been Latecomers: A Critical Review of High-Tech Industry and Social Studies of Technology in Taiwan

This article illustrates the development of the latecomer concept, starting initially from studies of Taiwan's high-tech industry and then proposing a latecomer thesis based on the theoretical arguments in that literature. That thesis has also influenced Taiwanese STS studies of technology, including transferred and local technologies and Chinese medicine, and this article shows how this approach has framed the scope of the literature's interpretation of empirical findings in different ways. Although the latecomer thesis has to some extent become dominant in academic approaches to technology in Taiwan, there exist alternative approaches derived from reflexive studies of Chinese medicine and of local reassembled-car technology, as well as of local trail-construction technology, all of which have broken out of the theoretical constraints of the latecomer thesis. On the one hand, some studies of Chinese medicine construct an insightful model integrating a practical ontology, a correlative thinking method, and displacement agency theory, sharing basic theoretical assumptions with Bruno Latour's actor-network theory. On the other hand, the studies of reassembled cars, plant grafting, bridge construction, and local trail construction highlight the undesirability of classifying diverse technologies into a simple binary and prescribing a convergent destiny for both technological and societal development. These arguments challenge the basic assumptions of the latecomer thesis and also demonstrate the strength of the model established by studies of recent Chinese medicine. Finally, this tripartite model is employed to reinvestigate Taiwan's semiconductor industry as an example of high-tech industries, and to show the networked reality of an industry in which a continuous mix of varied technologies occurs, new trajectories emerge, and technological objects as industrial actors continue to make linkages with other societal elements. The reinterpretation of this industry exemplifies the fact that no given element in a society is isolated from other parts, and that social reality essentially keeps reassembling.

Comparison of competing models and multi-group analysis of organizational culture, knowledge transfer, and innovation capability: an empirical study of the Taiwan semiconductor industry

This study proposes a theoretical model to examine the relationships between organizational culture (OC), knowledge transfer (KT), and innovation capability (CI) in Taiwan’s semiconductor industry. Structural equation modelling is employed to discuss the degree of influence on each construct. In order to recognize what the better model and whether the model will be moderated for different industry chain positions (upstream, midstream, and downstream), this study uses competing models and multi-group analysis. A total of 433 valid responses were collected from 10 Taiwan semiconductor firms’ R&D departments. Through the competing models, we find that supportive culture is better than bureaucratic and innovative culture. Findings also reveal that managers should shape a supportive culture and encourage KT to promote CI in the semiconductor industry supply chain. KT is a partial mediator between OC and CI. In addition, after multi-group analysis, the results show that culture has significantly different relationships with KT and CI.

The Co-evolution of Technology and Institutions in the Catch-up Process: The Case of the Semiconductor Industry in Korea and Taiwan

This paper explores the industrial specialisation of latecomer countries, particularly Korea and Taiwan, which are often referred to as successful catch-up cases. The traditional wisdom is that the ‘developmental state’, resource leverage, and technological sophistication in an export-oriented strategy have been the factors for success. However, firm strategies and a supportive government are not sufficient to explain the different features of catch-up patterns. In this paper we propose that differences in industrial specialisation of catch-up countries are attributable to the interaction between technological characteristics and institutional settings, including corporate organisation, industrial structure, and the role of the public sector.