The Internet of Things (IoT) has become an important development sector for industry giants such as Qualcomm, Intel, Amazon, Google, and Apple in various fields.

Taiwan's semiconductor industry also pays much attention on IoT which has created new business opportunities. Former TSMC Chairman Morris Chang once said that the company will emphasize on Internet of Things (IoT), automotive, high-performance computing (HPC) and mobile areas. The foundry leader’s development directions are important references to Taiwan semiconductors companies when it comes to the future development plans.

However, how to kick off the IoT development at its early stage?

It’s hard to make a start on a new business which they have little understanding or never get involved before, not to mention make a profit from it. Business incubators have emerged to solve this problem. The Nankang IC Design Incubation Center (NKIC) located in the Nangang Software Park aims to help Taiwan's semiconductor companies to enhance competitiveness in IC design and software developments on IoT.

NKIC Executive Manager Jih-Ping Wu indicated that Taiwan companies started to enter the IC industry since the PC era. At that time, Taiwanese IC design companies focus on developments of north and south bridge chips, USB controllers, touch sensors unlike foreign companies who provide various types of ICs. Taiwanese IC designers have been dedicated to the PC development that they are familiar with, instead of other new areas because they think non-PC industries have limited applications. Since they focus on specific areas, there has been intense price competition among local players. As a result, the industry has an unhealthy growth.

In light of this, Wu made a thorough discussion with Industrial Technology Research Institute and related government departments, sharing his working experiences in large-sized enterprises and IC design startups in Silicon Valley in the U.S. After the discussion, they decided to build a development plan of NKIC, which aims to promote IC industry development and expand its development scopes. Its main function is to look for potential IC design and IoT-related startups. It hopes to prevent the IC design industry from growing slowly or being a stagnant industry.

Why choose IoT? IoT is the development focus of the global leading companies, and projected to revolutionize the world by bringing many new business opportunities and services. Wu explained that the industries all understand the IoT’s importance and influences. However, the IoT industry is still underdeveloped with less progress in cross-industry applications. When the development has been accelerating, the design concept has been formed, the IoT devices are estimated to reach a certain level of sales, Then, the demand of IC design will rise. It’s too late for IC design houses to enter the market when the IoT market has been well-developed. The early entrants have benefitted from the booming market. Therefore, it’s the right time to promote IC designs and boost the development in the IoT-related fields now.

When the center was established, there were only three employees who focused on personnel management and administration. Personnel costs are one of the largest expense areas to startups. For a new company with only a few staff, it generally takes much time to deal with miscellaneous tasks. Wu explained that the staff helps those companies to deal with administration tasks, helping them to put more emphasis on new technology developments and reduce personnel costs.

NKIC has been expanding the scope and types of services to achieve the goal of sustainable development of Taiwan's IC design industry. It keeps asking excellent talents from Silicon Valley to set up companies in Taiwan. About the technical services, it includes hardware and software architectures in the IT field, EDA tools, SoC/IC/FPGA designs, Internet technology development, smart connectivity and artificial intelligence (AI) applications, embedded software development, design and integration of information and communication systems, and other developments on semiconductor devices and EDA software. The organization also helps technology transfer from scientific findings of industry-academia cooperation projects and promotes R&D collaborations among industry partners. With regard to non-technical services, the organization provides chances of cooperation with distributors, consultation on business plans, promotions via advertisements and e-newsletters, and measurement of equipment or facilities. It also provides accounting, legal and patent consultations, and looks for investors to provide investment to the companies. Besides, there is an IoT startup accelerator to help new companies to develop their business and bring their innovative ideas to life.

The long-time effort has come to fruition. At present, the only one startup which provides AC/DC power management ICs in Taiwan will go public on the OTC market at the end of this year. Besides, the other company chose to enter the niche market, providing USB products for data centers, instead of entering competitive consumer USB market. Wu said that the incubation center neither looks for leading industry nor IC design houses with advanced manufacturing process. “We don’t plan to nurture a new startup to a large-sized company. We are here to help startups to find its development directions and competitiveness in the industry; and further expand the industry ecosystem in Taiwan.

NKIC looks at the IoT development from the system level, and has recently begun to explore opportunities from software development. Wu pointed out that a complete solution is composed of both software and hardware. When we look at a system at the perspectives of hardware, software and systems, we could thus discover more opportunities and solutions. Then, we can find out better operation directions and advise the new startups in NKIC to move toward a more promising future.

Wu emphasized, “The incubation center isn’t built to nurture new startups that can drive economic development immediately. Its main goal is to convey and widespread the concepts in the semiconductor industry, keeping the industry continuously evolving and growing.”