Wistron of Taiwan opened for business in 2001 a less-than-healthy newborn. It had been spun off as a contact manufacturing arm of the then lossmaking Acer of Taiwan, relying on the ailing parent for 80% of its $2 billion of sales. After listing in Taiwan in 2003, Wistron's stock swooned two-thirds amid worries that it was recklessly chasing revenue at the expense of profits. The company lost $25 million in 2004.

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Wistron has roared back to make this year's Fab 50, diversifying its clientele and product lines. Its recovery says much about the resilience of Taiwan's IT industry in the face of changing times. Diplomatically isolated, the island has an economy that is seamlessly integrated into Asia and beyond. Nine of its companies make the Fab 50 list, and a slew of others, mostly from tech, were in contention (see Canny Contenders).

What explains the knack of these mostly no-name outfits? "Wistron shows how Taiwan companies continue to be very adaptable," says Henry King, head of Taiwan research at Goldman Sachs (nyse: GS - news - people ).

The presence of both Wistron and former parent Acer on the 50 also highlights the interconnectedness of Taiwan's high tech. Successful manufacturers often are tied to several listed companies. List contender AU Optronics (nyse: AUO - news - people ), a display-panel maker, is also tied to Acer through a 4.8% stake. Flamboyant Taiwan billionaire Terry Gou's Hon Hai Precision has at least another four Taiwan-traded affiliates: Pan-International, Foxconn Technology, Innolux Display and Cybertan Holdings. A big Hon Hai phonemaking arm, Foxconn International Holding, is also listed in Hong Kong.

Partly behind the phenomenon: hunger for capital and new technology. Chipmaker Nanya Technology's main shareholder, island plastics giant Nan Ya Plastics, shares the burden for expensive new plants with outside investors.

Taiwan investors have welcomed the fact that different listed companies focus on a small number of goods and are therefore easier to sort out, says Daniel Hsin, head of research at Capital Securities, one of Taiwan's largest brokerages. Meantime, larger companies also like to take strategic stakes in order to gain access to manufacturing capacity; for instance, Taiwan Semiconductor Manufacturing, a Fab 50 member that is the world's largest specialized contract maker of semiconductors, said on Aug. 24 it would raise its stake in Taiwan-listed Vanguard Semiconductor by 11 percentage points from 27% in order to better coordinate on orders that involve 8-inch wafers.

Last but not least, in a place of frequent family squabbles, offspring of founders can hive off entities to go their own way while still having the fallback of working with parents or siblings. Among them is another of this year's contenders, HTC (formerly High Tech Computer, now mostly a phone-set producer), led by Cher Wang, the daughter of Y.C. Wang, the leader of the Formosa Plastics Group, which also controls Nan Ya Plastics.

Buoyed by strong worldwide economic growth, Taiwan companies produced $90 billion of it hardware last year, an increase of 11% from 2005. The biggest source of revenue comes from laptop computers, a niche that Taiwan controls 86% of globally; notebook sales rose by 22% to $40 billion in 2006, according to the Market Information Center, a Taipei market research firm. Besides Wistron, the Fab 50 includes contains Compal Electronics, another laptop maker. Another island manufacturer, Taiwan Semiconductor Manufacturing, supplies chips for the machines while Chi Mei Optoelectronics produces screens.
Most companies trace their roots to the 1970s and 1980s when Taiwan was known as a cheap-computer hub dubbed the "counterfeit kingdom." That image started to change in the 1990s as the Internet boom spurred an era of rapid growth in electronics sales.

Leading multinational companies like HP and Dell (nasdaq: DELL - news - people ) outsourced to island firms, and Taiwan itself turned to mainland China for lower-end work.

At least some of Wistron's know-how dates back to the days before Acer's reorganization when IBM (nyse: IBM - news - people ) outsourced computers from Acer, says King of Goldman Sachs. "IBM shared know-how, and that team is still present," he says.

Canny Contenders

These eight Taiwanese technology companies also scored well on our Fab 50 screen.

Advanced Semiconductor Engineering (nyse: ASX - news - people )

AsusTek Computer

AU Optronics

HTC

Inventec

Lite-On Technology

Quanta Computer

Siliconware Precision Industries (nasdaq: SPIL - news - people )