Back in the mid-1970s, Taiwan was more of a regional leader in umbrella production than in technology products. Then, Shih Chintay was working on a highly speculative initiative now known as the RCA Project, a collaborative effort with the U.S. company to transfer IC technology to Taiwan.
RCA seemed an unlikely partner, not a leader in the IC industry of that time. But it was willing, and that was enough. "In the beginning, there was no supporting industry," Shih recalls. "Most of the equipment vendors at that time had never heard of Taiwan, and they wondered why we wanted such expensive, sophisticated equipment."
In the following years, considerable, and persistent, doubt existed about whether a maker of widgets could manufacture wafers. More than 10 years after Shih embarked on his journey, former Texas Instruments executive Morris Chang started a letter-writing campaign, asking foreign companies to support his notion of a contract maker of chips.
Only about 10 percent responded, and just one Philips was willing to invest. "The fear of the foreign investors was that in 1986 in Taiwan, there wouldn't be any people who could develop a good business model for a successful company," said Chang, the founder of Taiwan Semiconductor Manufacturing Co. "Of course, it was right under their noses."
Since then, recurring doubts have been voiced about Taiwan's ability to adapt, to find the right people or to excel in technology development, Chang said. Skeptics, he said, would pepper him with questions like "Do you have e-business people, do you have enough finance talent, do you have accounting talent and people who are really acclimated to globalization, or who can prosper in a knowledge economy?"
"Well, we have managed to find these people," he said. "And we [at TSMC] are now responding to the modern knowledge-based economy just as well as any other company in any other country." Taiwan will do the same, Chang added.