In the era of globalization, economic scale and efficiency are crucial factors in production and manufacturing, and Taiwan, with its limited land and dense population, has maximized the benefits of industry clustering. Around 2000, Taiwanese businesses flocked to China for development, expanding their production bases from the Pearl River Delta to the Yangtze River Delta, and even settling in Chengdu, Chongqing, and Zhengzhou. China's experience represents the extreme development of vertical specialization.
With Taiwanese businesses establishing themselves in China and the emergence of the iPhone, coupled with the vigorous development of China's domestic economy under "Made in China 2025," China gained an opportunity to build its own electronics industry supply chain. With the support of China's local governments, major electronic manufacturers began to flourish and compete with Taiwanese businesses for the Apple supply chain. In addition to the conditions for vertical integration, Chinese domestic companies can further leverage innovation-driven horizontal integration through local market demands. Many people predicted that Taiwanese businesses' good times were coming to an end.
The clustering effect of the business environment
As mentioned earlier, when the Hsinchu Science Park was established in 1979, it could be described as lackluster in terms of attracting attention. However, Taiwan's industrial policies, like its corporate management, are flexible. Unlike Japan's Tsukuba or South Korea's Daedeok Science Town, which overly emphasize research and development, making it difficult to implement production and manufacturing activities in the field of technology - Taiwan's science parks also welcome mass production and manufacturing, maintaining a highly interconnected relationship with the Hsinchu Industrial Research Institute a few kilometers away. They support each other without being under each other's control, preserving the necessary independence and flexibility. These are the key factors to the success of the Hsinchu Science Park.
In the mid-1980s, Taiwan's personal computer and peripheral equipment manufacturing industry began to take off in the technology industrial belt that extended south from the Xizhi district west of Taipei. This was made possible by the excellent relay power provided by the Hsinchu Science Park. The local computer manufacturing industry and returning semiconductor elites formed new industrial clusters under the banner of the Hsinchu Science Park, which is now renowned for its semiconductor manufacturing capabilities.
The implicit value of endorsement from government and industry
The limited land in the Hsinchu Science Park has been fully utilized, and the government has replicated industrial clusters in Tainan and Taichung, achieving good results. However, we believe that "Hsinchu Science Park" can be more than just a symbol of Taiwan's domestic industry; it can also be the vanguard of Taiwan's new southbound industry. We suggest that the Hsinchu Science Park establish a presence in southbound countries through licensing or cooperation models. With the reputation of the Hsinchu Science Park, Taiwanese businesses will find it easier to form industrial clusters. Local governments, knowing the reputation of the Hsinchu Science Park, will also be able to pass on, replicate, and leverage the experience of the Hsinchu Science Park overseas. This will allow the intangible value of the Hsinchu Science Park to create new opportunities.
