Intel CEO urges Taiwan to hand IT output to China
By Michael Kramer
TAIPEI, July 30 (Reuters) - Intel Corp (NasdaqNM:INTC - news) CEO Craig Barrett urged Taiwan on Monday to move up the information technology production chain to research and design and leave low-cost manufacturing to rival China.
ADVERTISEMENT
``Taiwan is undergoing a transformation similar to that which happened in the United States about a decade ago, which is that manufacturing is tending to move to areas of lower cost -- mainland China, for example,'' said Barrett, head of the world's leading chipmaker.
``There are some things that it makes sense to worry about, and there are other things that it makes sense to recognise that they are happening and then to move forward,'' Barrett told a news conference in Taipei.
Taiwan firms were the world's third largest manufacturers of information technology products last year, but many local firms have moved production lines to China to tap its huge market and low land and labour costs.
Acer Inc , Taiwan's largest personal computer maker, is among the firms that have pinned their hopes on China's consumers.
``The China resources and market should be part of our advantage,'' Acer Chairman Stan Shih told a panel discussion with Barrett and Chunghwa Telecom Chairman Mao Chih-kuo.
Goverment officials, however, have viewed the trend with alarm. Earlier this month, Vice President Annette Lu blamed the island's economic slowdown on China's ``cash magnet'', and urged the business community to keep its money in Taiwan.
Wary of economic dependence on China, Taiwan forbids China investments in strategic areas such as infrastructure and high-end semiconductors, and maintains a US$50 million cap on a single project.
Beijing considers self-governing Taiwan a breakaway province that must eventually be reunified, by force if necessary.
Barrett said Taiwan companies, which provide components, designs and contract manufacturing for global customers such as Dell (NasdaqNM:DELL - news), Compaq (NYSE:CPQ - news) and Ericsson , already had a strong base for moving up from a manufacturing role.
``You have already succeeded, you have strengths to build upon, and you need to recognise you can build upon that strength rather than trying to protect what you already have,'' he said.
He said Taiwan was in the process of becoming ``a country that will build off of that base and move up the value chain towards the creation and design of new components, new standards, new research and development''. |
