Day 2 in Taiwan: National Taipei University, Hsinchu Science Park, and Elite Semiconductor Company

We had a campus tour at the National Taipei University. TPU is regarded as one of the best universities in Taiwan, particularly in the education of law, business, public administration and social science.  We had a class where students and Master of Marshal arts showed us some of the self-defense moves.

After the entertainment, we got an insight of Chinese calligraphy. I even learned how to write my name:

After all the fun stuff, we had a lecture on Taiwan's high tech industry. Taiwan is a major cog in the worldwide supply chain: In total, it is the world's largest supplier of electronic devices. Taiwan is good at Contracts equipment manufacturing, electronics manufacture service, original equipment manufacture, and original design manufacturing. Taiwan is also good at providing integrated services, turnkey solution of cellular phone, and Atom System-on-Chip Microprocessors for Intel. When it comes to holding inventory, companies have a short product lifecycle, long production time, fluctuated demand, uncertain supply, rush orders, and proliferation of products.

Nominal GDP grew by 127.2 % between 1990 and 2006. The value of inventory increased by 78.4% during the same time period. Inventory costs as a percent of GDP declined from 17.9% in 1990 to 14.1% in 2006. The absolute value of inventory increased during this time period, but it decreased as a percentage of GDP.

In electronic industry some of the inventory is being kept. The reason is that batching economies or cycle stocks arises from three sources: procurement, production, and transportation. Scale economies are often associated with all three, which can result in the accumulation of inventory that will not be used or sold immediately. There is also a safely stock due to uncertainly which all organizations are facing. On the demand side, there’s usually uncertainty in how many customers will buy and when. On the supply side, there might ne uncertainty in obtaining what is needed from suppliers and how long it will take for the fulfillment of the order. Another reason to keep stock is the time/in-transit and work-in-process stocks. There are also seasonal stocks. Seasonality can occur in the supply of raw materials, in the demand for finished goods, or in both. Seasonality can greatly impact transportation.

After the lecture we visited Hsinchu Science Park. Science parks are established to introduce high-tech industries and attract talent to Taiwan, promote the upgrading of Taiwanese industries, balance regional development and drive national economic development. One of three science parks existing in northern, central and southern Taiwan, the Hsinchu Science Park(HSP) is primarily focused on semiconductors; meanwhile, the Central Taiwan Science Park is focused on aviation, precision machinery, and optoelectronics, while the Southern Taiwan Science Park is focused on optoelectronics. Consequently, each of these science parks possesses its own respective core technological advantages.

Regarding the overall performance of the Park in 2004, 335 of the 384 Park companies were domestic companies while 49 were foreign. The total revenue of the six main industries reached US$32.5 billion, representing a growth rate of 27% in 2004. Accumulated paid-in capital was US$32.2 billion.

Regarding new investment, 48 applications from new companies were approved in 2004, representing total capital of US$1,290 million. Meanwhile, regarding applications for increased investment, 55 companies applied for investment, totaling US$2,159 million.

Additionally, 97 Park companies were listed on the TAIEX and OTC markets at the end of 2004. Furthermore, Taiwan Semiconductor Manufacturing Co., Ltd. (TSMC), United Microelectronics Corporation (UMC), and Macronix International Co., Ltd., were also listed on the American Depository Receipts (ADR) Market. (2)

The next activity was a Visit to Elite Semiconductor (ESMT) where we had a lecture about the products and overall performance of electronic companies doing business in Taiwan.