A Study of the Vertical Disintegration of Taiwan's Semiconductor Industry
|關鍵字:||台灣半導體產業;垂直分工;Cournot-Nash 平衡;價格模型;非價格因素;專利分析;決策過程;TTaiwan's integrated circuits industry;vertical disintegration;Cournot-Nash equilibriam;price and non-price factors;patent analysis;decision-making process|
Survival in highly competitive markets requires producers to focus on both price and non-price factors such as quality, innovation, adherence to standards and rapid response as the basis for competitive advantage. In an effort to meet these new demands, firms are deploying a range of innovations including advanced equipment and reconfiguration of business model, such as both their internal organization and their external relationships. Vertical disintegration business model is one of the innovations in such a competitive market. While the literature has devoted much attention to vertical integration, there has been little study on the causes and effects of vertical disintegration. Taiwan’s semiconductor industry has been prominent and ranks number four in the world. The vertical disintegration model of Taiwan’s semiconductor is a very unique one among the integrated circuit industries around the world. The objective of this dissertation is to study the vertical disintegration model of Taiwan’s semiconductor industries. An introduction of the IC foundry and IC fabless was included in this report. An overview of Taiwan’s semiconductor industries as well as the role of the Taiwanese government in the industries was introduced. A model which there are both integrated (IDM) and unintegrated (IC foundry and IC fabless separated) firms was presented. A vertical disintegration model in which there is a Cournot-Nash equilibrium at both stages of production, upstream (IC design) and downstream (IC fabrication), has been proposed to explain analytically the market price changes subjected to vertical disintegration. It was suggested that the market price of the integrated circuit decreases if the numbers of IC fabless firms are more than half of the total IC firms and are more than the numbers of IC manufacturing firms. By spinning off the equipment division which needs a high capital, the semiconductor company can actually make profits by concentrating more on the increasingly complex integrated circuit designs. The disintegrated foundry companies can provide advantages of more specialty, higher quality, lower cycle time and good cooperation relations for the IC fabless firms. Five non-price factors leading to the vertical disintegration of Taiwan’s semiconductor industries have also been proposed: (1) industrial localization and cluster, (2) fast changes of technology, (3) significant increase of development cost, (4) emergence of IC fabless, and (5) government’s support. A patent analysis was also completed to investigate the relative competitiveness of Taiwan’s IC fabless industry in the global market. The vertical disintegration of integrated circuits is expected to be the trend for future for semiconductor manufacturing. In addition, the future challenges and directions of Taiwan’s semiconductor industries were also identified. The structural and institutional problems of the innovation system were identified. Future directions of technology development were also discussed. Finally, the opportunities and dangers of Taiwan’s semiconductor investing in China, and the decision making process of lifting the ban were presented. It was concluded that the decision making process of Taiwan’s wafer investment in China still depends highly on the political process.