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Technology Stocks : Cymer (CYMI) -- Ignore unavailable to you. Want to Upgrade?

To: TI2, TechInvestorToo who wrote (17905)	5/30/1998 4:28:00 PM
From: pat mudge	Read Replies (1) \| Respond to of 25960

An island of optimism in a sea of gloom: From June 1, 1998 Forbes: <<< Taiwan, almost alone in Asia, remains economically healthy. The little island has much to teach Japan and Korea-and even the U.S. Silicon Valley East By Andrew Tanzer "WHEN I WAS AT INTEL, I dreamed about starting my own company," recalls Miin Wu. That's hardly an unusual sentiment these days, and like thousands of other people, Wu realized his dream. But not in Silicon Valley and not in the U.S. The Stanford-educated Wu recruited a group of 28 ethnic Chinese engineers and raised startup capital from Hambrecht & Quist and went home to Taiwan. There, in 1989, in Taiwan's Hsinchu Science Park, Wu and his recruits established Macronix International Co., Ltd. to manufacture high-end computer chips. "We mixed a U.S. technology base with Taiwanese manufacturing technology," explains Wu. Today Macronix has a stock market capitalization of $2 billion. The story is not unique. Combinations of U.S. know-how and Taiwanese entrepreneurship, engineering and manufacturing skill are creating enormous new wealth on this island of 21 million. Taiwan bustles with high-tech activity-almost a trans-Pacific replica of Silicon Valley. In this it differs significantly from, say, Japan and Korea, which built their late-20th-century prosperity on mass manufacturing. While much of Asia is mired in recession, Taiwan thrives. This year economic growth should top 5%. "If Taiwan didn't have high-tech industries the last three to four years, it would be in bad shape, too," asserts Ta-lin Hsu, Taipei-based chairman of H&Q Asia Pacific. Many of these firms, clustered in a 60-mile corridor between Hsinchu and Taipei, are run by some of the tens of thousands of Taiwan-born engineers and scientists who have returned from the U.S. with skills, experience and contacts. "They've tried to clone what's gone on in the U.S.," explains Diahann Brown, a Hong Kong-based senior fund manager at Dresdner RCM Global Investors (Asia) Ltd. The electronics sector of the Taiwan Stock Exchange has surged 170% over the past 18 months and the country's over-the-counter market bulges with new computer-related listings. There's a roaring, unregulated trade in "gray market" unlisted technology shares, and billions of dollars have flowed into the island's vibrant venture-capital industry. "There's a high-tech gold-rush feeling here," muses Wen Ko, a wealthy venture capitalist and former Hewlett-Packard executive. "Very few countries have so many people willing to put money into high-risk startups." After the U.S., probably no country has created as much new wealth in the personal computer industry as Taiwan. Taiwan's electronics industry is spawning new U.S.-dollar billionaires. Among them: Hon Hai Precision's Terry Kuo, Advanced Semiconductor Engineering's Jason Chang and Winbond Electronics' Chiao family. The wealth created has been widely shared. Stock options are illegal in Taiwan, but Taiwan startups compensate for low salaries with generous grants of stock to most of their workers. A booming stock market has done the rest. At phenomenally profitable Taiwan Semiconductor, engineers have reportedly earned $400,000 to $500,000 a year over the past couple of years because of lucrative stock bonuses. Even janitors have grossed $50,000 a year. This, in a country with a per capita income less than half that of the U.S. You can see the prosperity in the comfortable new homes springing up in such places as Hsinchu and Taipei. A bubble? The stock market may be overheated, but the fundamentals are solid. The small island is the world's largest supplier of a laundry list of high-tech gear: computer monitors, modems, motherboards, keyboards, power supplies, scanners, pointing devices, desktop and notebook computers. No wonder Taiwan's treasury bulges with foreign reserves of $84 billion: 95% of the country's high-tech output is exported. "We're the manufacturing center for the American personal computer industry," asserts Eric Wu, chairman of Taiwan Securities Co., Ltd. The brand on your desk may say Compaq, HP or Dell, but it's probably made in Taiwan by an entrepreneurial firm such as Compal, Acer, Inventec or Mitac. "Taiwan has become an extension of the U.S. high-tech industry," explains Peter Shen, general manager of IBM Taiwan Corp. >>>>