Taiwanese officials acknowledge it is impossible to reverse the tide. They say their goal is to pace the transfer of technology to China so that Taiwan retains a viable industry of its own. Among the technologies they are encouraging are flat-screen monitors and mobile communications. If the notebook producers move out too fast, and the suppliers follow them, it will hurt the development of higher-end industries. The trouble is, Taiwan is no longer such an alluring place to do business.
Land is scarce and expensive.
The Hsinchu industrial park was the prototype for Asian technology parks when it opened in 1980. Today, it is overcrowded and prone to brown- outs because of inadequate electricity. In 1999, an earthquake briefly halted production at its chip plants and rattled the global industry. Taiwan's labor force also comes up short. Its universities turn out 4,000 engineers a year, versus 145,000 in China.