Riding the PC Wave: Taiwan’s Tech Boom in the 1990s
Taiwan rode the PC wave in the 1990s, with companies like Acer, Asus, Compal, FIC, Foxconn, Gigabyte, Mitac, and Quanta churning out over 70% of the world’s PC desktops and laptops to meet the surge in worldwide demand sparked by the explosion of the Internet.
The industry’s explosive growth didn’t come from simple assembly alone. It also reflected Taiwan’s move up the value chain into advanced components and chip design. With the launch of Intel’s Pentium and the ever-escalating processor arms race, Taiwan’s foundries, led by TSMC and UMC, anchored a cluster of innovative “fabless” design firms. Companies like VIA, Realtek, and MediaTek seized the chance to deliver custom logic, graphics, audio, and networking ICs for global PC and laptop makers. By 1993, PC-related exports from Taiwan topped $10 billion per year, testament to the ecosystem’s technical maturity and market agility.
While Japan’s tech giants bet heavily, and in hindsight, too narrowly, on commodified DRAM, Taiwan firms doubled down on the open, modular PC platform. By flourishing through partnerships, speed, and flexibility, Taiwan firms captured huge shares of the motherboard, peripheral, and desktop and notebook PC contract manufacturing spaces and the island’s high-tech clusters continued to draw talent and returning overseas engineers, reinforcing a virtuous cycle of quick iteration and rapid learning.
Foxconn epitomized this opportunity. Founded by Terry Gou in 1974 with just NT$7,500 and ten elderly workers, the company started by making simple plastic parts for televisions. Gou’s tenacity and cutthroat pricing soon won orders from major global PC brands in the less than glamorous world of connectors and cables. By 2000, Foxconn was a $2 billion behemoth, leveraging dense factory networks in Taiwan and China and employing tens of thousands. Its rise underscored the power of unseen infrastructure: an army of managers who knew how to deliver under pressure and scale up landmark deals without fanfare.
Meanwhile, the global processor contest heated up. Intel’s tight control over PC standards, and the ecosystem that built up around them, forced Taiwan’s manufacturers into a complex dance. As AMD and Cyrix rolled out lower-priced chips, Intel countered with lightning-fast product launches and an “Intel Inside” marketing machine tying critical rebates and pricing to brand loyalty. At times, firms shipping AMD Athlon motherboards did so in unmarked white boxes, wary of jeopardizing crucial Intel relationships.
Intel’s legal muscle further shaped the battlefield. Lawsuits targeting VIA over AGP and Pentium 4 patents flooded the courts from 1999 to 2003, spreading uncertainty and making manufacturers wary of embracing rival chipsets and processors. While VIA countersued to protect its position, the protracted struggle sapped momentum for Intel’s challengers and reinforced its grip on the minds — if not the hearts — of Taiwan manufacturers and global PC brands.
Intel finished the decade with revenues of $33.7 billion in 2000 up from $3.9 billion in 1990, reflecting global PC shipments that ballooned from 20 million to over 110 million units. Taiwan’s PC industry matched this ascent, with annual revenues rising from $2–4 billion to as high as $35 billion, easily outstripping the island’s GDP growth and cementing its place as the world’s computer manufacturing core.
Yet, as the new millennium approached, one of the strategic inflection points Andy Grove warned about in his seminal book, Only the Paranoid Survive, was looming. After two decades of explosive growth, the PC train was slowing down, and neither Intel nor Taiwan’s PC industry base were prepared for the next major industry shift.
