Challenges for the Taiwan IT Industry in Transition

In recent years, the IT industry in Taiwan has been confronting the challenges of declining profit margins and a shortage of engineers. One logical solution is to take advantage of the abundant supply of engineers and lower labor cost in China. Beginning in the early 1990s, Taiwan's IT industry started to move offshore to mainland China, and has become the major Taiwanese investor in mainland China today. However, rising unemployment and declining economic growth in Taiwan prompt many debates over government policy for controlling outward investment to mainland China. The real challenge now is how fast Taiwan's IT industry will transform from OEM-oriented manufacturing to R&D, design, and high value-added product manufacturing.