Strong rebound likely in technology sector

But TSMC head cautions businesses not to be too dependent on govt help

By Ho Ai Li, Taiwan Correspondent

TAIPEI: Not only has the technology sector recovered, but also it will 'rebound strongly' this year, predicted Dr Morris Chang, a key player in the global chip industry.

That bodes well for Taiwan, home to many of the world's largest high-tech companies, and other Asian economies which rely heavily on the high-tech sector.

But while the worst may be over - thanks to generous stimulus spending by governments around the world - businesses should not become too dependent on government help, cautioned Dr Chang, who heads Taiwan Semiconductor Manufacturing Company (TSMC), the world's largest custom-chip maker.

His remarks at a key business forum underscored growing optimism among Asian technology suppliers, which are scrambling to expand capacity to meet soaring consumer demand for products ranging from semiconductors to flat-panel screens.

Taiwan's key technology sector has also shown signs of recovery, with major companies embarking on recruitment drives aimed at boosting production.

Overall, things are looking up for the tech sector, which will rebound strongly this year, Dr Chang said yesterday at an economic forum organised by Taiwan's prestigious CommonWealth magazine.

Prospects for next year are also rosy, he predicted.

Reflecting improved business sentiment, TSMC had earlier announced plans to hire 3,000 more engineers.

Dr Chang also revealed yesterday that he plans to boost research spending to NT$27 billion (S$1.18 billion) this year, up by a quarter from last year.

Despite the rosy prospects, he voiced concerns that businesses may have grown too dependent on the government, which played a key role in mitigating the impact of the global financial meltdown.

Many companies had come to expect preferential measures, such as tax cuts, from the authorities, noted Dr Chang, one of Taiwan's most respected business leaders.

Businessmen should not lose their entrepreneurial spirit and the courage to take on difficult challenges, he told the forum.

Taiwan's boom years in the 1970s and 1980s were characterised by a sense of bravery and optimism, but these sentiments have been replaced by pessimism, he noted. But he pointed out that optimism is an essential quality, especially for those in the tech sector.

'Pessimists blame others from day to night. Can they innovate?' he asked.

Dr Chang said he is confident that Asia will replace Europe and the United States as the centre of the world economy after the financial crisis. 'Asia's new opportunity is in replacement fuels, in green energy industries,' he said.

Green energy was also on the minds of other speakers at the forum yesterday afternoon.

Professor Hu Angang of Beijing's Tsinghua University said China must seize the chance to be one of the leaders of the next industrial revolution, which would see a new model of economic growth decoupled from high carbon emissions.

For the past 20 years, China has pursued 'black-cat style economic growth', he said, referring to former Chinese leader Deng Xiaoping's famous saying: 'It doesn't matter if the cat is black or white, as long as it catches mice.'

'China must change from being the world's biggest black cat to a green cat,' said the prominent economist.

But the key question was whether China could pursue an alternative growth route using green energies, he said.

Other panellists said a greener future was not necessarily about new technologies but mindset changes.

As Mr Goh Chye Boon, head of the Sino-Singapore Tianjin Eco-City venture, said: 'You can have a lot of waste recycling systems, but if residents have no concept, they'd mix it up.'

Source: Straits Times, 20 Jan, 2010.