Based on the evolution of industry modularization and structure, the study intends to explore the integration model of Taiwan’s IC industry chain. Next, centering on knowledge innovation, the study analyzes the encouragement of knowledge innovation system and new approaches to policy-making under current knowledge mechanism and external conditions. Eventually, the study proposes a 3-D dimensional module of knowledge integration, value modules, and product integration to analyze the realization model of industry chain integration, and explore organizational styles that can realize the three integration methods. Finally, case study will be conducted on Taiwan’s IC industry development process, and extract revelations on industry upgrading, and development of modularization by verification of integration theories.