The head of the Taiwanese Semiconductor Manufacturing Company (TSMC) has warned that the industry needs to innovate in order to stay ahead.
Morris Chang, chairman of TSMC, said that while semiconductor manufacturing in Taiwan had made great leaps in the past 20 years, it had to do more to continue its success - and broaden its focus from making other companies' processors.
'My worry is that while foundry facilities are a good niche, they are rather limited,' he said. 'We should get closer to our end market. The semiconductors you develop have to match your market.'
He warned that a shortage of staff was still a major problem. 'We still lack innovative people and if we establish this, we will be able to become a significant IT player in the world,' he said.
Meanwhile, the country's major electronics players admitted they are falling behind in the monitor market. Chen-Pen Lin, director of the influential Market Information Centre (MIC), said monitors, which formerly led Taiwanese production ahead of notebooks, desktops and motherboards, will fall to third place this year.
'In terms of displays, growth is not high,' he said. 'We still have 12.6 per cent growth in volume in the first quarter of 1998 but in value it's negative growth. This is the first time we've seen negative growth. Worldwide, there's been over-expansion in monitors and that had a damping value.'
But Lin claimed the country's overall IT industry was still growing, despite the economic woes. He said: 'For the first quarter of 1998, despite the impact of lower price PCs, growth is still 17.6 per cent. We are also seeing manufacturers receiving a significant number of orders in high-end production.'
Lin said the value of the Taiwanese electronics market in 1997 amounted to $30.2 billion, which showed a 20.9 per cent growth from 1996.
See analysis page 16.
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