The yield of Taiwan's semiconductor industry has reached the mark of NT$900 billion in year 2002 after two decades of efforts. In fact, Taiwan has ranked the world fourth in production scale of semiconductor and played a crucial role in this industry worldwide. Mainland China is with the advantages of significant domestic market, inexpensive labor, and productive land. Moreover, preferential tariff, therefore, it is a market with great incentive to the general public. The semiconductor industry is in an early stage in Mainland China. However, international corporations are willing to invest and build up semiconductor industry there, therefore, it is a market with potentials. Taiwan's semiconductor industry is with industrial cluster effect and with sufficient experience in manufacturing process and business operation. That operation is beyond the reach of Mainland China. Taiwan and Mainland China share the same culture. Therefore, Taiwan understands Chinese market and management better than Europe, America, and Japan. Mainland China represents a great opportunity to Taiwan. However, it may become a threat if a responsive strategy is not formed properly.