While the trend of Taiwan industries to move plain manufacturing operations abroad continues, the nation's reserve of hi-tech talent in all disciplines does not go unnoticed. More multinational enterprises, notably those in the ICT field are establishing R&D centers in Taiwan, not only for technological applications but also for basic technological research.

Statistics by the Ministry of Economic Affairs show that as of fall this year, 27 multinationals had established 30 R&D centers in Taiwan, including major international mobile phone brand vendors and major international IC design houses. Several multinationals with existing R&D centers on the island, including IBM, HP, Dell, Microsoft, and Intel, have been expanding their facilities.

To make use of Taiwan's increasing sci-tech potency, some of these centers have broadened their activity to basic technological research. In the past, they simply provided industrial assistance to domestic ODMs to cut down time-to-market for their products, improving product quality or to joint product development.

IBM'S greater China Software R&D Center was founded in Taiwan in 1999 with a staff of 350. It is now the largest foreign software R&D facility on the island. In 2002, the company established its first biotech research center in Asia here, followed by its first offshore xSeries server R&D center in 2004.In October 2006, the ministry reported, IBM announced that it would upgrade the server facility to a “ system and sci-tech R&D center “, adding three R&D items with higher technological content to its roster of tass.

Intel set up an R&D center in Taiwan in 2003. /this was the first Internet communications R&D center outside the U.S.,focusing on the development of long-distance wireless communications standards such as WIMAXCraig R. Barrett, Intels chairman, noted that the center engages in basic research, not only in the improvement of existing products.

Phoenix Technologies, which claims an 80 percent share of the global BIOS market, founded a Taiwan R& D center two years ago. The company has transferred its technology to the center to shorten time-to-market. Taiwan is the fastest-growing of all its overseas markets, which account for 70 percent of the firm's total revenue.

Microsoft established a Microsoft Technological Center (MTC) in Taiwan three years ago and a Window Media Engineering Center (WMEC) last year, helping local ICT firm to create the equivalent of US$84,8 million in additional production value by providing 59 technological solutions, according to the company's regional director for Greater China.

Further, in cooperation with Taiwan's Ministry of Economic Affairs, Microsoft has launched an RFID strategic alliance in Taiwan with the aim of helping the island promote RFID-related applications and products.

A Taiwan manager of Apple Computer points out that the level of Taiwan's expertise in the ICT field has become quite well developed, enabling the island to develop clients' ideas into products with the clients having to provide specificiations.

A Dell manager notes that with the establishment of the company's product development center in Taiwan, it has slashed its product development time to three to six months, from at least six months in the past. The newly developed products are delivered to Dell's Chinese factories for manufacturing.

The chairperson of HP Taiwan, Mrs. Rosemary Ho, notes that the main factor in HP's decision to set up a product development center in Taiwan was the island's pool of quality talent, fostered in part by major domestic ODM makers such as Quanta, Compal, ASUS, AND Winston.

Another major factor, the chairperson continued, was the incentives offered in the Taiwan government's “ plan for encouraging the establishment of R&D centers by foreign enterprises “ Some of the incentives are provided for only three years, they have lapsed for seven foreign firms already and will run out for the remainder next year. The Ministry is reportedly considering new incentives that will persuade the untertaking of new R&D projects on Taiwan.

The proliferation of foreign R&D centers has begun to strain Taiwan's supply of talent. Therefore, some insiders are urging the government to consider allowing the introduction of sci-tech personnel from China to Taiwan.