Competing in the global LED industry: The case of Taiwan

Light-emitting diode (LED) is a very essential application for energy-savings nowadays. The revenue of the Taiwan LED components industry is ranked top one in the world, followed by that of Japan and South Korea. Based on the advantage of their electronics industry, Taiwanese LED companies create a unique model to compete with the international firms. Large international LED companies achieve economies of scale by vertically integrating their operations. Taiwanese LED companies specialize and achieve an optimal efficiency by vertically disintegrating across the upstream, midstream, and downstream sectors in the value chains. Taiwanese LED companies create economies of scale and economies of scope through a complete industrial value chain.