Abstract
Taiwan GaAs(Gallium Arsenide) whole industry reach prevailing around 2000 and there are a lot of GaAs upstream and downstream firms to be founded including 7 pure-player foundries. These foundry founders expected to be a first-mover aggressively in GaAs foundry in order to follow Taiwan silicon foundry innovation trajectory and will be another TSMC in GaAs field. But after several years, these GaAs founders find there are not enough purchase orders to meet their capacity and still could not break even in their finance. Until in 2004 June, Procomp’s finance scandal led people to doubt Taiwan GaAs industry’s future especially the high capital GaAs foundry industry which have more strictly challenge. Although GaAs foundry belongs to Semiconductor fabrication industry for process foundry, the GaAs market size and product development is quite different with silicon industry. If these GaAs foundry players want to be another TSMC, the strategy should be analyzed and compared and find a unique route for GaAs industry. Taiwan’s successful foundry model dedicated in process development results in IC design house dedicated in product development rising and flourishing foundries’ revenue continue to growing up. Charles H Fine’ “Clock speed winning industry control in the age of temporary advantage” book mentions that it is not immediately happen for one IDM industry transfer to a vertical division of labor situation. After eliminating through competition severely, the vertical division of labor industry becomes more mature and appeals to more upstream customers enter into the industry. The first mover’s success depends on the industry scale and IC design house development then these foundries will become healthy and strong. Currently these GaAs foundry firms all confront cruel competition and challenge. The case study collects Taiwan past silicon successful information based on experts’ opinion and compares the difference between silicon industry and GaAs industry. Finally through the research to point out the GaAs unique business model for future’s strategy development direction and find a successful key point.