Public-private alliance launched to spur high-tech machine sector

This article was written by Bowun Jhu and published by the Taiwan Journal on December 30, 2005. It reports that the Taiwan Optoelectronics and Semiconductor Equipment Association (TOSEA) was launched recently in Taiwan by an alliance of semiconductor and optoelectronics companies, machinery manufacturers and governmental research institutes and agencies.

According to the Industrial Development Bureau under the Ministry of Economic Affairs, although the value of semiconductor production in Taiwan hit a record-high US$32.54 billion in 2004, using equipment valued at about US$6.9 billion, a mere 2.3 percent of the equipment content originated in Taiwan. Meanwhile, also in 2004, the local-content rate for the US$2.8 billion worth of machinery used in TFT-LCD manufacturing (with a production value of US$16.11 billion) stood at only 13.4 percent.

In other words, although semiconductor and optoelectronics manufacturers are among Taiwan's flagship enterprises, Taiwan has fallen behind other similar countries in the development of semiconductor and optoelectronics equipment production. In recent decades Taiwan's high-tech manufacturers have been focusing on expanding their manufacturing capacity, instead of cooperating with and fostering the capability of local machinery makers. It is feared that their dependence on foreign suppliers will make them less agile and more vulnerable to delays in receiving needed equipment.

Therefore, the goal of the Taiwan Optoelectronics and Semiconductor Equipment Association is to boost the level of local content in the equipment used by semiconductor and optoelectronics manufacturers in Taiwan. In the case of optoelectronics machinery, if Taiwan's flat-panel makers are willing to develop cooperative ties with local equipment manufacturers, then the local-content rates of etching and photoresist stripping and cleaning equipment can be expected to rise significantly.

According to the U.S.-based market research firm DisplaySearch, Taiwan will overtake South Korea to become the world's No. 1 flat-panel display maker by the end of 2005. It is expected that the production value of Taiwan's flat-panel display industry will reach US$25 billion in 2005 and will top US$30 billion in 2006.