Huang Der-Ray, director general of the Hsinchu Science Park Administration, said companies in the park had steadily increased spending on research and development from 4 percent of total revenue in previous years to 7 percent in the past three years.

Companies have also begun to focus on innovation and building their own brands. Mediatek, a chip design company that initially focused on optical storage drivers’ chips, has ventured into other areas, including designing chips for wireless communications and high-definition digital televisions. The company is one of the most profitable in the science park and is considered a pioneer in its designs.

Several companies in the science park have focused on research into new technologies, including solar energy. Just in the past two years, more than 15 companies in Hsinchu have invested in solar research, Huang said. One, Gintech Energy, has been successful in designing solar panels, which it sells to power companies around the world.

More companies are also moving toward design instead of just manufacturing. A decade ago, only about 20 or 30 companies in the Hsinchu Science Park were chip design companies, with most being contract manufacturers. Now, there are 80 companies whose focus is IC design, Huang said.

“This is Taiwan’s Silicon Valley,” Huang said. “This park is not just a manufacturing base. It wants to design new products. We are now going toward this direction, creating Taiwan’s own brands.”

Analysts said one of the biggest challenges Taiwan companies faced in developing a global brand is overcoming the label-consciousness of consumers here, who prefer internationally recognized brands rather than domestically designed products. Other than Acer and ASUS, which are laptop brands of Taiwan, few homegrown Taiwan high-tech products are known around the world, unlike in South Korea.

[From the IHT]