Scientific thomsonreuters.com

Professor Ruth Taplin
October 2008

Taiwan's government is looking to nanotechnology to make Taiwan more globally competitive. They aim to increase patenting and commercialization of nano products by promoting cooperation between universities, industries and public organizations.

Taiwan is at the forefront of patenting semiconductor and other IT-related products. In 2004 over 40 of their products ranked number one in terms of global market share. These were derived mainly from three local industries: semiconductor, optoelectronic and communication.

Despite the fact that Taiwan's Integrated Circuit (IC) products have strong global sales, a number of their IC technologies lag behind leading global technologies. The Taiwan government is now looking to nanotechnology to make Taiwan globally competitive once more, by increasing patenting and the commercialization of products through a unique model that promotes cooperation between universities, industries and public organizations.

Development of nano-electronic technology
Taiwan firms lag behind the global leaders in Dynamic Random Access Memory (DRAM) and Flash memory. Local DRAM makers depend on Japanese partners for their core technologies, as they do for Magnetoresistive Random Access memory (MRAM) and Ovonic Unified Memory (OUM).

Taiwan's research institutes and industries are attempting to advance their own global competitiveness by focusing on next generation IC memory. They are developing nano electronic technology in three key areas – volatile DRAM, non-volatile MRAM and OUM – as well as CMOS (Complementary Metal-Oxide-Semiconductor) organic electronics.

The Taiwan government plans to spend over USD 1 billion on furthering nano science and technology between 2003 and 2010. This funding will be shared between the basic research supervisor National Science Council (NSC), including the Nano Device Laboratory (NDL) and the Industrial Technology Research Institute (ITRI).

Government control and direction of large scale research projects is unique to Taiwan, where the government even has a say in private financing. In Japan and South Korea such government direction towards R&D and patenting is now lessening, and being replaced by increased reliance on private company financing or patent pools.

A unique form of government support
ITRI's research funding will be focused on industrialization of technology. The institute is developing nanotechnology platforms to produce high standard results through cooperation between related industries, academics and research centres.

In September 2006, Lux Research, the New York based analyst forecast that Taiwan would become a major player in the nanotechnology field within the next three years. They also ranked Taiwan number one internationally in terms of per capita government funding for nanotechnology during 2004.

The National Science and Technology Program for Nanoscience and Nanotechnology (NSTPNN) programme coordinates the research efforts of various government organizations to assist in promoting academic excellence, and to establish common core facilities and educational programmes to facilitate the development of industrial applications. Based on the global competitiveness of the semiconductor, optoelectronic and communications industries, the NSTPNN programme intends to improve academic excellence and develop innovative industrial applications that lead to extensive patenting and commercialization of the products. In establishing internationally competitive nanotechnology platforms, the NSTPNN strives to further advance innovative research to accelerate the commercialization of nanotechnology. The NSTPNN programme is implemented through the promotional cooperation between universities, industries and public organizations.

Public support for nano investment
As nano research and development (R&D) requires significant investment in infrastructure, Taiwan's public sector subsidises and encourages private nano R&D by establishing common core facilities. About one fifth of the funds for nanotech research are distributed in these core facilities.

One major focus of nano science and technology development in Taiwan is the industrialization of innovations. Based on nano R&D infrastructures and research capacities, in addition to the achievements of academia, this sub-program stresses innovative applications by leveraging industry entrepreneurship and linking industry to academia to expand the core competencies of industries. The majority (76 per cent) of the public nano R&D funding has been allocated to this industrialization sub-programme.

The industrialization sub-program that is operated primarily by ITRI launched a '2008 Target' this year that emphasises product differentiation among electronics, materials and chemicals, and among metals and machinery. To achieve these targets, ITRI has dedicated itself to developing 'star' nano technologies in innovative applications involving IC, display, data storage, photonics, electronic packaging and nano-biomedicine.

Nano-specific patent records
Nano-specific patent records and projections of industrial output can be used to assess the prospects of Taiwan's nano sector. For most International Patent Classification (IPC) categories, Taiwan's nano patents increased during 2000 to 2006. These patents were focused on display and semiconductors at the industry level.

Encouraged by the massive government funding of nanotechnology-related R&D projects, Taiwan's nano sector has recently begun to launch new products, especially for the integrated circuit and optoelectronics industries. A recent Nanotechnology Research Centre (NRC) survey forecast that nanoelectronics and display would be the future 'star' nano industrial sectors. As nano science is cross disciplinary, competitive advantage is being enhanced through product development between IC design firms and mobile telephone manufacturers where R&D requirements overlap, global reputation is boosted and pathways for exports are opened.

The survey mentioned above showed that about 22 countries were represented in foreign applicants of nano patents granted by the Taiwan Intellectual Property Office (TIPO). Domestic applicants including companies, individuals and research institutes are the most active applicants, holding 60 per cent of the granted nano patents. The US and Japan follow at 15 and 14 per cent respectively, with Germany at five per cent, South Korea at two per cent and others at four per cent. ITRI was the leading applicant from Taiwan, accounting for nearly 10 per cent of the granted patents.

A case study of government/private collaborations in Taiwan
The Taiwan Semiconductor Manufacturing Corporation (TSMC) was established in 1987 when it cooperated with Phillips to launch the foundry model in the semiconductor industry, specializing in the manufacture of custom-made wafers under contract to chip designers.

TSMC has performed in an outstanding capacity in promoting the rapid growth of fabless and foundry companies during the past decade. The centre of IC manufacturing has gradually relocated from North America to the Asia Pacific region, where output has surpassed that of any region since 2001. This shift in the IC market has encouraged the development of a fully fledged disintegrative industrial structure in Taiwan. The supply network of Taiwan's IC industry in 2005 included 268 fabless design houses, four mask manufacturers, 13 fabrications, 33 packaging companies and 35 testing houses. Taiwan is also home to material providers of bare wafers, chemical, leadframe and PCB substrate, which are all related to semiconductor manufacture.

Clustering and cooperation are key features of Taiwan's IC industry. More than 80 per cent of these IC companies are co-located in Hsinchu Science Park, the largest of Taiwan's three science parks. The interconnected IC cluster in the Park facilitates efficient communication between customers and providers, and the movement of human resources between companies.

Subsequently, the vertical cooperation developed among firms in clusters. These can encourage greater business/knowledge collaboration, and promote business linkages and knowledge spillovers that enhance competitiveness in emphasising flexible and rapid responses to the market. Such cooperation can also result in patent pools and sharing resources such as human resources and data bases for commercialization of a product.

As a result of these strategies TSMC ranked 7th and 6th among the top ten global IC companies in 2005 and 2006 respectively with a 20 per cent sales growth.

Figure 1: Top 10 IC companies worldwide

More specifically TSMC has formed a design center alliance with fabless IC design companies in the Hsinchu Science Park, including GOYA and Alchip. Such close connections encourage new firm formation, making Hsinchu Science Park an attractive base for innovation enterprises.

Not only will the innovative activities of Hsinchu Science Park tenants draw benefits from the agglomeration effect of industry clusters, but new enterprises will also be drawn to the Park. Furthermore, the design center alliance of TSMC has been established around the world, and most of the products of Hsinchu Science Park IC design firms have been sold to many major international companies.

Global linkages therefore, mean important sources of technology and markets for HSP foundry and IC design firms. The building of IP highways between neighbouring East Asian countries to the US and UK will enable more effective patent prosecution on a global scale.

Nanotechnology cooperation
Very recently, there has been intensive development of nanotechnology cooperation and alliances among TSMC, the Electronics Research & Service Organization (ERSO) in ITRI, university research centres and global companies.

An example would be a MRAM TSMC/ERSO joint project that initiated in 2002. Recent breakthroughs in nano-scale processing include the '45-nanometer chips' and the 'functional 65nm embedded DRAM device'. TSMC began making smaller, more energy efficient and more powerful 45nm chips in September 2007. Moreover, the 65nm DRAM device offered by TSMC provides higher bandwidth, lower power consumption, and a near 50 per cent reduction in cell and macro size compared to previous high density memory generations. TSMC has made such rapid progress in nanotechnology that it has attracted cooperative opportunities with world leading IDM chip makers such as TI, NXP (formerly Phillips) and Nvidia, a US fabless company.

Taiwan government support, coupled with close cooperation among businesses, and the clustering in the Taiwan Hsinchu Science Park, is making Taiwan highly competitive in the global nanotechnology marketplace – the most rapidly expanding technology of the future. With such close cooperation, patenting in the nano field in Taiwan is accelerating at a rapid rate, alongside commercialization of the products.

I would like to thank Prof. Chyi of National Tsing Hua University for her invaluable assistance in preparing this article.

About the author
Prof Ruth Taplin is Director of the Centre for Japanese and East Asian Studies. She received her doctorate from the London School of Economics and is the author/editor of 14 books and over 200 articles. She can be reached at Ruth.Taplin@btinternet.com

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