Abstract
The origins of the Taiwan IC design industry are to be found in the development of low-end consumer products. However, with the backing of long-term government policy support, the Taiwan semiconductor industry has been able to establish first-class semiconductor foundries, in the process allowing Taiwan to become the country with the second largest number of IC design companies in the world. In recent years, with the increasing popularity of the wafer foundry model, the entry barrier for start-up IC companies, has been lowered. It must also be noted, however, that in the face of tough global competition, the slightest wrong move could see a company easily overtaken by its competitors. The ability of the IC design industry, to maintain long-term stability in terms of both growth and profit has become a very important and popular topic. In proposing three basic growth strategic choices, the present paper draws on the perspectives of evolutionary theory, resource-based theory, dynamic capabilities, transaction cost economics and social networks. In the first of these, which is based on the evolutionary perspective, the generic expansion strategy with its insistence on structural hierarchy, is developed. In the second, following transaction cost theories, the strategy of acquisition to internalise external resources, is identified. The third, by using similar organisational points of view, is to develop a mix of non-hierarchical and non-market based network relationships, similar to strategic alliances. By using cross-oriented comparative method, the proposed three models are used to analyse both the uniqueness and commonality in the growth strategies of four Taiwan IC design organizations, namely those of Sunplus, EMC, SIS, and Holtek. Theoretical, empirical, and managerial implications are drawn from this study.