Anyone interested in where Taiwan's high-tech industry is headed should see Wen-chi Chen. He is CEO of Via Technologies Inc., Taiwan's biggest semiconductor design company. In a region where most chip companies focus on manufacturing, which requires massive capital, Via's success as a chip designer shows there is reason to be optimistic the island can succeed in knowledge-intensive industries, even as many electronics factories move to China.
Under Chen, Via has emerged as second only to Intel Corp. (INTC) as a global supplier of chip sets, which connect a computer's microprocessor with the rest of its functions. The 46-year-old Chen, a graduate of National Taiwan University and California Institute of Technology, took the helm at Via in 1992. Since then, he has forged a close relationship with Advanced Micro Devices Inc. (AMD), Intel's chief rival in microprocessors. Via makes about 80% of all chip sets sold to accompany AMD's devices. The business has been lucrative: Via's earnings surged 230% last year, to $192 million, on sales of $900 million. Via's stock, even after sliding recently along with the rest of the local market, has been among Taiwan's best performers, rising 46% so far this year. Merrill Lynch & Co.'s Taipei-based semiconductor analyst, Daniel Heyler, praises Chen as "a driven and dynamic leader who very much understands what customers want."
Chen is not entirely comfortable with his newfound fame. When he started in the industry at age 22, he says, "I wasn't thinking I wanted to become a semiconductor guru." A born-again Christian who embraced religion in 1997, Chen regularly peppers conversations with his thoughts about the Almighty and the small role that individuals play in the great scheme of things. "I don't trust myself at all," he explains. "I trust God a lot more."
You wouldn't know that from Chen's bold ambitions for Via. He believes the future is in very affordable computers and Internet appliances and sees a niche Via can exploit. So Via has branched out into microprocessors. It's a risky enterprise, since numerous technology companies have tried and failed to take on Intel. But Chen figures Via can design chips that are cheaper and use less power than those now on the market. He also hopes to take advantage of the good contacts that Via's controlling shareholder, Chairwoman Cher Wang, has developed in China. Her father is founder of Taiwan's Formosa Plastics Corp. empire, and her brother Winston is building a big, new semiconductor plant in Shanghai.
With so many local electronics companies moving operations to the mainland, a lot of Taiwanese are wondering if the island still has a high-tech future. But Chen thinks fabless chip-design companies like Via can become a model for Taiwan's next generation of tech companies. "I'm still pretty bullish about the future of Taiwan," he says. "Taiwan has run into problems in the past many times. It's never easy, since we're a small island. But we have the infrastructure and the talented people."
Chen knows the odds are against him in microprocessors. But he's accustomed to taking on industry giants. For instance, Via has battled a host of lawsuits from Intel alleging copyright infringement; so far, the company hasn't lost a single case. More litigation may be coming: On June 6, Via unveiled a new chip set designed to support Intel's Pentium 4 microprocessor, without procuring a license from Intel. Via hasn't launched the chipset yet, but Chen has said that the debut won't be far off. And even as he fends off challenges by companies like Intel, Chen doesn't shy away from taking action against others: Via is threatening to sue U.S. chipmaker Nvidia Corp. (NVDA) for marketing an AMD chipset that threatens the Taiwanese company's dominance.
Chen likens the struggle to a basketball game. "Intel is 7-foot-2, and AMD is 6-foot-11," he says. "Even though we are shorter," says Chen, "we are fast and can easily move around." If Taiwan's industries are to survive the rough competition from global corporate behemoths--and from China--many other tech companies will have to learn to be nimble as Chen's Via Technologies.