The IC fabless industry in Taiwan: current status and future challenges

Abstract Taiwan’s IC fabless industry (fabrication-less integrated circuit industry) is the second largest in the world. This article explores the current status and future challenges of the IC fabless industry in Taiwan. The country’s national system of innovation (NSI) for IC design was investigated, which suggested that four major elements of NSI—government policy, human capital, industry clusters, and bridging institutions—explain the extensive diffusion of new technologies within the industry. An analysis of related patents was also conducted to determine the relative competitiveness of Taiwan’s IC fabless industry in the global market. The analysis found that Taiwan owns the second-largest number of IC design patents. Then, structural and institutional challenges facing the innovation system were identified. The article concludes with a discussion of future challenges and directions for Taiwan’s IC fabless industry.

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