Comparative Analysis on Platform Strategy of Foxconn and TSMC; Difference of R&D Investment, Cost & Human Resources Management

Both Foxconn OEM platform and TSMC Open Innovation Platform (OIP) have taken the head in Taiwan’s Tech industry development. The Foxconn has showed a great performance at the revenue size, and TSMC is superior to other firms of Taiwan at the revenue and operating profit increase speed. So, this study made a comparative analysis for the distinction between two platforms from the operation feature, the competitive advantage factor and the sustainability. It looked into the success factor of platform operation, and analyzed the management result trend as well as the difference of R&D investment, cost and human resources management. In result, Foxconn OEM platform strategy has concentrated on a low-cost labor intensive business of which competitive advantage resulted from the cost leadership. On the other hand, TSMC OIP strategy has pursued a high-cost labor intensive business of which competitive advantage came from the differentiation. Above all, TSMC OIP succeeds in not only improving the economies of scale while keeping a high fab operation rate, but also upgrading the system chip performance for fabless customer. The former is closely concerned with the cost leadership, and the latter requires a close collaboration among various partners, so it is very similar to the economies of scope. Overall, the sustainable growth of both platforms is highly possible because each growth strategy is still competitive in cost control and customized service.