Taiwan's electronics industry emerged in the 1960s with the creation of a small but well planned integrated circuit (IC) packaging industry. This industry investment led to bolder investments in research, laboratories, and the island's first semiconductor foundries in the 1980s. Following the success of the emerging IC manufacturers and design houses, hundreds of service firms and related industries (software, legal services, substrate, chemical, and test firms among others) opened for business and completed Taiwan's IC manufacturing supply chain. The challenge for Taiwan's electronics industry is to take the lead in the design, manufacture, and marketing of name brand electronic products. This paper introduces the Si-Soft (silicon software) Project, a national initiative that builds on Taiwan's achievements in manufacturing (referred to as Si-Hard or silicon hardware) to launch a new wave of companies. These firms will contribute to the core underlying technology (intellectual property) used in the creation of electronic products. (C) 2003 Elsevier Science B.V. All rights reserved.