The park will be near the central west coast city of Taichung, about an hour south of the existing Hsinchu Science Park, and will be the smallest of the island's parks. But unlike the Hsinchu and Tainan science parks, the third park probably won't be anchored by semiconductor manufacturing companies, said Wei Che-ho, chairman of the cabinet-level NSC, which oversees the island's science parks.

"If there are some semiconductor industry companies, especially those related to IC design that don't require a lot of electricity and water, they will be most welcome," he said. "But we hope the precision machinery industry will be more promising because there are already a lot of factories related to machinery in central Taiwan."

The NSC is also targeting biotechnology, aerospace, telecommunications and optoelectronic industries for the 430-hectare (1,062-acre) development. But even before the first shovel full of dirt is turned, the park is certain to face some competition from new science parks in mainland China near Shanghai and Beijing. During the past few months, Chinese officials have been in Taiwan trying to woo residents of Hsinchu to new facilities in the mainland that have cheaper labor and a more readily available supply of power and electricity.

So far, none of Taiwan's big semiconductor companies has expressed an interest in building in Taichung. For the park to be successful, however, it will need at least one high-profile anchor tenant, said Steve Hsieh, former vice chairman of the NSC and one of the key officials who participated in the early planning for a third park.

A few years ago, when the search for a third park location began, semiconductor companies complained that Taiwan didn't have enough land or utility resources to handle the industry's expansion. "Things have changed now for a few reasons," Hsieh said. "One, the semiconductor industry is in a downturn; two, more IC fabs are thinking about moving to the mainland."

Because of the shift, the rapid development of Taiwan's second science park in Tainan has been derailed, Hsieh said. Once estimated to surpass the importance of Hsinchu by 2005, the second park "will certainly slow down," Hsieh said. "The industry had tumbled so fast that people are cutting investment. Plus during the past few years, Taiwan has changed so much. The large volume manufacturing is no longer very competitive here. Most of that is really in the mainland now so we will probably have to change our philosophy. Instead of focusing on IC or component manufacturing, designing will become more and more important."

Wei said he hopes the closeness of Taichung to Hsinchu will encourage IC design firms to open offices in the new park, on which the NSC will spend about $290 million for building infrastructure.