Taiwan's dominance in the global foundry market stems from a breakfast 44 years ago

Source: Content from "Economic Daily", thank you.

One out of every two chips in the world is made in Taiwan. Taiwan's wafer foundry industry dominates the world, with TSMC holding more than 50% of the market share, far ahead of its competitors. The story of this brilliant achievement began with a breakfast meeting at a soy milk shop 44 years ago.

In 1974, Taiwan was dominated by labor-intensive light industry and processing and export industries. Faced with mature industrial development and the rise of third world countries with a large number of cheap labor, Taiwan needed to find a turning point for the next generation of industries to take over.

In February of that year, at the Xiao Xin Xin Soy Milk Shop on Nanyang Street in Taipei City, some of Taiwan's heavyweight political and financial figures of the time gathered, including Fei Hua, Minister of Economic Affairs Sun Yun-suan, Director General of the Telecommunications Administration Fang Xian-chi, Minister of Transportation Gao Yu-shu, President of the Industrial Technology Research Institute Wang Zhao-zhen, Director of the Institute of Telecommunications Research Kang Bao-huang, and Pan Wen-yuan, director of the research laboratory of the American Radio Communications Corporation (RCA), who strongly advocated the development of Taiwan's integrated circuit industry.

The picture shows Sun Yunxuan (left), Minister of Economic Affairs, and Chiang Ching-kuo, then Premier of the Executive Yuan, on the right.

They held a breakfast meeting while eating breakfast. Regarding the direction of Taiwan's industrial transformation, they decided to use integrated circuit technology as the blueprint for industrial development and outlined the vision of Taiwan's future transformation into a high-tech industry.

In addition, they also decided to seek partners from the United States to introduce integrated circuit research and development, manufacturing, packaging and testing technologies in order to gain time efficiency.

Subsequently, Pan Wenyuan convened overseas scholars in the United States to form an Electronics Technology Advisory Committee (TAC), selected RCA as a technology transfer partner, and decided to introduce complementary metal oxide semiconductor (CMOS) technology in integrated circuits. He established the Electronics Industry Research and Development Center (later expanded to the Institute of Electronics) at the Industrial Technology Research Institute as the executive unit of the "Integrated Circuit Project."

The first batch of young people who participated in the RCA program. Many of these members went abroad for the first time and gained a lot of experience during their training in the United States. The picture shows some members taking a group photo at Disneyland, including Wan Xueyun (from left), Shi Qintai, Zeng Fancheng, Xu Jian, and Qiu Luohuo. Zeng Fancheng/Provided

In April 1976, a team of 19 people who had been recruited and trained went to the United States and successfully brought integrated circuit technology back to Taiwan. The success of the RCA project made society and the people realize that Taiwan had the ability to develop technology on its own and move towards the goal of developing high-tech industries.

In October 1977, ITRI built and put into operation the first integrated circuit demonstration factory in Taiwan. Talents who had been trained in the United States returned to Taiwan to engage in production and research and development. The demonstration factory used a 7.5-micron process, and the product yield rate reached 70% in the sixth month of operation, far higher than the 50% of the technology transfer parent factory RCA, and the results exceeded expectations.

In order to industrialize the technology, it was decided to establish Taiwan's first semiconductor manufacturing company, UMC, as a spin-off company in 1980, and transfer 4-inch wafer technology and engineers from the Industrial Technology Research Institute's Electronics Institute to assist UMC in R&D and manufacturing, including Cao Xingcheng, who later became UMC's chairman.

In 1976, ITRI signed an "IC Technology Transfer License Agreement" with RCA of the United States, and sent Zeng Fancheng, Cao Xingcheng, Chen Biwan, Liu Yingda and other seed workers to transfer technology. ITRI/provided

Later, the United States, Japan, South Korea and other countries realized that integrated circuits had a significant impact on national development and actively invested in them, leading to the rise of technological protectionism internationally.

In 1984, ITRI took over the "Very Large Scale Integrated Circuit (VLSI) Project" and invested in its own research and development, inviting Morris Chang, who was once the global vice president of Texas Instruments, to serve as the president of ITRI.

Taiwan's first 6-inch wafer factory was completed in 1986. At the suggestion of Morris Chang and with the support of then-Minister of State Li Kuo-ting, TSMC was established in 1987. The equipment and talents of the VLSI project were transferred to TSMC, creating the first professional wafer foundry model.

The picture shows the black-and-white photo that Morris Chang was most satisfied with during his tenure as president of ITRI.

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