This paper studies the original equipment manufacturing (OEM) dilemma from the view of global supply chains. Taiwan’s OEM factories make maximal effort in global supply chains but for minimal profit. In the recent years, it is more unlikely for Taiwan’s OEM factories to earn profit due to the decreasing of Mainland China’s grassroots labor force, the increasing of minimum wage, social and health insurance on labour. Based on the government of global supply chain framework proposed by Gereffi et al. (2005), this paper finds it is hard for Taiwan OEM’s factories to earn more profit from buyers because of their high degree of monitoring and control. This paper also suggests that (1) Taiwan OEM’s factories may develop partnership with buyers by supporting their development and production of new, high added value products. (2) Taiwan OEM’s factories may provide a customer solution by supplying full packages and modules, from product design to product manufacturing.
