[Charity Book Donation] Taiwan Industrial Technology Research Institute and the Rise of the Semiconductor Industry

When it comes to the Industrial Technology Research Institute of Taiwan (hereinafter referred to as "ITRI"), the most well-known thing is that it is the cradle of Taiwan's semiconductor industry. Founded in 1973, ITRI has gone through more than 50 years of development and witnessed Taiwan's transformation from an economy dominated by agriculture and handicrafts to an industrial highland that influences the global innovation chain and industrial chain in the semiconductor field.

During its development, ITRI has developed key, innovative and forward-looking technologies through technological research and development, promoted scientific research results, provided guidance to small and medium-sized enterprises in technological upgrades, and cultivated industrial technical talents, playing a leading role in the process of technological research and development, technology transfer and industrial upgrading in the entire Taiwan region.

ITRI ​​has not only developed many forward-looking and critical technologies for Taiwan, but also provided professional services for intellectual property rights, transferring more than 600 technology projects each year, and becoming the patent backing for Taiwanese companies. In addition, ITRI has incubated a number of emerging technology industries in Taiwan, cultivated countless scientific and technological talents, including more than 100 CEOs, and incubated more than 270 outstanding companies.

The core of ITRI's success lies in its cooperation with the industry. By designing mechanisms, it knows what to do and what not to do, thereby enhancing Taiwan's industrial innovation capabilities.

Innate industrial genes

In the 1970s, the world oil crisis broke out. As Taiwan, which mainly relies on imported energy, saw high prices and a sharp increase in production costs, the economic structure of Taiwan, which originally relied on exports to earn foreign exchange, was seriously challenged. In 1974, Taiwan's economic growth rate dropped to 1.1%, a record low since the 1950s. The economic downturn has triggered thoughts on economic transformation. Some people in Taiwan's industrial economy believe that only by getting rid of the labor-intensive development model and turning to a technology-intensive path can Taiwan's economy be completely transformed.

The establishment of the Taiwan Industrial Technology Research Institute is one of the important arrangements for economic transformation. Taiwan merged the United Industrial Research Institute, the United Mining Research Institute and the Metal Industry Research Institute, which were scattered in various places, to form the Taiwan Industrial Technology Research Institute. The research and development focus of the Taiwan Industrial Technology Research Institute is not basic research, but practical technology, and it conducts research around the commercialization, industrialization and marketization of scientific and technological achievements.

In its more than 50 years of development, ITRI's management philosophy and strategic layout have undergone several adjustments, and its business has continued to expand, but it has never deviated from its main line and original intention of conducting scientific and technological research and development and technical service activities based on the technological development needs of enterprises.

The president of ITRI is not only a scholar, but also a salesman facing industry organizations, enterprises, and authorities to fight for funding. The same is true for the directors of its institutes. ITRI encourages its scientific and technological experts to communicate with the industry, listen to the difficulties of enterprises, understand the needs of enterprises through field observation and discussion, and then rack their brains to think about how to meet the needs of enterprises.

Taiwan's Industrial Technology Research Institute does not obtain funding from the authorities through scientific research projects, but the authorities are also its customers. Funds are obtained through competitive applications for special research projects. Taiwan's Industrial Technology Research Institute operates like a construction company that contracts to pave roads and build bridges. After winning the bid, it is commissioned by the authorities to carry out work. Taiwan's Industrial Technology Research Institute not only goes out to find buyers on its own, but also has customers who take the initiative to transfer technology to enterprises. Random exchanges at various meetings may also be a way to promote the connection of transferred technology.

In the early days of ITRI, the Taiwan authorities provided sufficient and stable funding subsidies, accounting for about 60% of ITRI's expenditures from 1973 to 1983. After ten years of exploration and operation, ITRI has become relatively mature in actively promoting scientific research results and providing related services to the industry and business community through commercial means.

By 1984, ITRI no longer relied on government subsidies and achieved a balance of payments, even with a slight surplus. Since the 1990s, ITRI has strengthened its industrial services, achieving a balance between the funding for public sector (including government-related agencies) and corporate commissioned projects for industrial services, with the latter showing an increasing trend.

Taiwan Industrial Technology Research Institute's main sources of income:

1. Project plan: A technology research and development plan commissioned by Taiwan’s economic departments, etc.

2. Technical services: enterprise-commissioned projects, as well as consulting, training, testing, analysis and other service projects for enterprises.

3. Project derivatives: Based on the needs of the private sector and the authorities, the technologies generated by the project are further derived to form research and development projects for specific products.

4. Non-business income.

Let researchers become CEOs

Let researchers become CEOs. Taiwan Industrial Technology Research Institute implements a flow mechanism for the transfer of technology and personnel to enterprises as a whole. When transferring technological achievements or promoting mature technologies to enterprises, it is often the case that technology and personnel are transferred to enterprises as a whole. In the course of its development, Taiwan Industrial Technology Research Institute has cultivated hundreds of CEOs and incubated more than 270 outstanding companies, including the semiconductor and personal computer industries, as well as the TFT-LCD panel industry, the LED industry, and even high-end machine tools, biomedicine and other industries.

Technology follows talent. Among the trendsetters who have entered the corporate world from Taiwan's Industrial Technology Research Institute, people are familiar with TSMC Chairman Morris Chang and MediaTek Chairman Tsai Ming-kai. As early as the beginning of the semiconductor research, Taiwan's Industrial Technology Research Institute realized that the key to shifting the technological high ground to Taiwan is talent. Hu Dinghua, then president of Taiwan's Industrial Technology Research Institute, proposed a plan to introduce integrated circuit technology and brought back high-level talents from the semiconductor industry such as Morris Chang, Tsai Ming-kai, and Cao Xingcheng from the United States. This laid a solid foundation for Taiwan's Industrial Technology Research Institute to carry out research and development, cultivate technological achievements, and incubate enterprises.

At ITRI, the revolving door between the research community and the industry is always open. ITRI researchers have a high degree of freedom to choose. They can choose to work at ITRI, leave, or come back after a period of absence. Every year, 10% to 15% of ITRI's talent flows to the industry, which is equivalent to releasing 500 to 800 R&D talents to the industry.

Nurturing Taiwan's semiconductor industry

Taiwan Industrial Technology Research Institute undertakes the R&D tasks assigned by the authorities, mainly targeting forward-looking common technologies with high added value, great market potential and low energy consumption. Taiwan Industrial Technology Research Institute organizes and promotes R&D, driving the improvement of industrial structure through breakthroughs in key common technologies, while also forming a dislocation with the R&D of the industry. The R&D of key technologies such as semiconductors, power machinery, computer systems, communication electronics, optoelectronic systems, and biomedicine have all driven the vigorous development of related industries, the most typical of which is the R&D of semiconductor common technologies.

On February 7, 1974, at the Xiao Xinxin Soy Milk Shop on Nanyang Street, relevant personnel from Taiwan’s economic, transportation, administrative, and telecommunications departments and leaders of the Taiwan Industrial Technology Research Institute jointly agreed to use integrated circuit technology as the entry point for Taiwan’s high-tech industry transformation.

In 1974, the Taiwan Industrial Technology Research Institute established the "Electronic Industry Research and Development Center" and approved a $10 million integrated circuit development plan.

Taiwan's Industrial Technology Research Institute sent a team of 37 engineers to the RCA factory in the United States for a year of intensive training in integrated circuit design and manufacturing. These people formed the core leadership of Taiwan's integrated circuit industry for decades to come.

In 1977, under the leadership of Taiwan Industrial Technology Research Institute, Taiwan's first wafer demonstration factory was established. After initially mastering the product line technology, Taiwan Industrial Technology Research Institute was also very clear that it should be handed over to enterprises for development. However, at this time, the private sector was not interested in semiconductor investment. Finally, under the financing led by the Taiwan authorities, Taiwan's first semiconductor company United Microelectronics Corporation (abbreviated as "UMC") was established. Taiwan Industrial Technology Research Institute gave the product line technology learned from RCA to UMC without reservation in the form of low-cost authorized production. At the same time, Taiwan Industrial Technology Research Institute also transferred more than 40 technicians to UMC.

In the late 1970s, the United States and Japan were scrambling for the semiconductor technology high ground. In 1984, Taiwan's Industrial Technology Research Institute took the lead in investing 70 million US dollars to start a large-scale integrated circuit plan. After technological research and development, Taiwan found that the lack of manufacturing capabilities was a defect in industrial development. As an emergency measure to make up for it, Taiwan built its first wafer foundry. Due to the lack of connection with the market, this foundry was basically idle afterwards.

In 1985, Morris Chang was invited back to Taiwan to serve as the president of the Industrial Technology Research Institute of Taiwan and the chairman of UMC. At the same time, he predicted a new industry trend - pure wafer foundry.

Taiwan's Industrial Technology Research Institute set its sights on integrated circuit design. In 1985, Taiwan's Industrial Technology Research Institute established the Integrated Circuit Common Design Center (CDC) to encourage emerging design companies. In subsequent development, it spun off more than a dozen companies with integrated circuit design capabilities.

Incubation fission, industrial ecology is formed

Spin-off companies are a very important technology industrialization model. According to the policy of Taiwan Industrial Technology Research Institute, any company established by the formal planning and approval of Taiwan Industrial Technology Research Institute and the transfer of certain mature technologies together with key personnel is a spin-off company of Taiwan Industrial Technology Research Institute. In 1990, Taiwan Industrial Technology Research Institute officially issued the "Regulations on the Establishment of Spin-off Companies of the Industrial Technology Research Institute", which accelerated the pace of the establishment of spin-off companies.

Taiwan's Industrial Technology Research Institute (ITRI) first helped to establish UMC in 1980 as a spin-off company. At the beginning, UMC was defined as a company that transformed the technology of Taiwan's ITRI. The establishment of TSMC ushered in a new era of chip foundry and also brought new pressure to UMC's development. UMC started the road of transformation - splitting the original integrated circuit design department.

These chip design companies that have been split off have formed a relatively complete chip ecosystem in Taiwan. Among them, MediaTek has become the world's largest mobile phone chip manufacturer, Novatek is the world's largest display driver IC design company, Unimicron is the world's third largest printed circuit board manufacturer, Faraday Technology provides application-specific integrated circuit design services, Pixar Technology is committed to complementary metal oxide semiconductor image sensing and navigation, Uni-Phoenix Semiconductor is a major supplier of notebook IO control ICs and embedded ICs, and Holtek Semiconductor has systematically transformed from a professional microcontroller IC design company to a projected capacitive touch panel IC design company.

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