Hsinchu is the  city (1995 pop. 340,255), NW Taiwan. The city and surrounding area are noted for the production of tea, rice, oranges, and petroleum. Hsinchu has become an important computer and electronics engineering and manufacturing center. Other major industries include petroleum refining and the manufacture of cement, fertilizers, textiles, and glass. Iron ore, coal, gold, and silver are mined. Immigrants from the China mainland formed a colony at Hsinchu in the early 1700s. Since the 19th cent. the city has been a thriving commercial center.

Taiwan's Silicon Island

Some left high-paying jobs abroad to come to Taiwan's version of Silicon Valley. Others drawn to the Hsinchu Science-based Industrial Park were native entrepreneurs who stopped making toys or shoes or calculators to ride the high-tech wave.

The park's creators, using tax incentives to draw low-cost factories, transformed a rural town 90 minutes from Taipei. Some 260 startup companies have blossomed since the park opened in 1980, making Taiwan the largest manufacturer of monitors, keyboards, mouse devices and motherboards. Taiwan also makes one-third of the world's notebook computers.

About 68,500 people work in Hsinchu Park with a median income of $26,000, more than double that of other Taiwanese workers. The park contributes $13.9 billion to Taiwan's $284 billion economy.

From the engineers' casual clothing to their Lexus and Acura cars, the park seems like a reconstructed Silicon Valley. One company even has a beach volleyball court. Though Taiwanese traditionally defer to their bosses during business meetings, conferences at the park are more lively and often in English, said salesman James Liu of D-Link Corp.

The reason? Many of the employees and engineers once worked in Silicon Valley.

One of the major companies, Macronix International, was founded in 1989 when some 20 Chinese-American engineers left their Silicon Valley jobs to come back to their homeland. Today, the company is a major supplier of microchips to Nintendo.

"They only had to bring their brains back," Macronix manager Lin Yun-lung said.

Hsinchu Science-Based Industrial Park (HSIP)

Established in 1980, the Hsinchu Science-Based Industrial Park has been at the center of Taiwan's high-tech industrial development in recent years. A magnet for returning overseas-educated Taiwanese engineers and scientists, the park is now the home of Taiwan's leading IT manufacturing companies, and by all measures has been a resounding success.

During recent celebrations marking the park's 20th year in operation, former chairman of HSIP Mr. Irving Ho remarked that the return of investment ratio of the park exceeds that of Silicon Valley in the US. Capital investment over the last 20 years of NT$655 billion (US$19.8 billion) has produced revenues of NT$3-4 trillion (US$91-121 billion), contributing an astounding 10 percent to Taiwan's GNP.

As of 2000, the park is now home to around 290 private companies and national laboratories, employing over 90,000 people. Although high-tech manufacturing industry dominates, R&D is not forgotten, with such expenses representing around 6 percent of total costs at the park. Major industries within the park include integrated-circuit production (including Taiwan Semiconductor, the world's largest made-to-order IC manufacturer), PC and peripherals, telecommunications, opto-electronics, precision machinery, and biotechnology.