Date: 2020-06-04

Source: Department of Information Services, Executive Yuan

Premier Su Tseng-chang on Thursday received a Ministry of Economic Affairs briefing on a program to make Taiwan a high-tech hub by nurturing emerging technology industries through R&D collaboration with foreign companies.

Current global trends combined with Taiwan's advantages and market conditions make the time ripe for Taiwan to transform itself into an Asia regional center for high-end manufacturing, high-tech R&D and advanced semiconductor processing. Building comprehensive supply chains for these industries will lay the foundations for long-term economic growth and create more jobs and business opportunities, the premier said.

The coronavirus pandemic has rattled the global economic order and upended industrial supply chains, the premier said. The deteriorating situation in Hong Kong, meanwhile, will also have considerable geopolitical implications for the Asia-Pacific region and the wider world. Amid such rapid changes, it will be critical for Taiwan to carve out a distinctive role, find a development niche, and expand industrial advantages.

China was once the world's factory, but the emergence of the coronavirus, Beijing's handling of the pandemic fallout, and changes within China itself have all increased risks for foreign firms doing business there. The U.S., Japan and other countries have therefore adopted specific policies encouraging companies to redeploy elsewhere or accelerate their withdrawal from China. While this has become an irreversible trend, it also presents an excellent opportunity for Taiwan to strengthen its industrial structure and with a firm foundation at home cast its glance toward the wider world, Premier Su said.

For the emerging industries program, the government will attract investment from global firms specializing in artificial intelligence (AI), the internet of things, cloud services and semiconductor manufacturing equipment, said the premier. By taking advantage of complementary strengths, domestic and international companies can establish reciprocal and mutually beneficial relationships that will push Taiwan's formidable contract hardware manufacturing sector to new heights.

The MOEA indicated that the program's principal framework will consist of research by foreign tech firms in Taiwan, co-innovation between Taiwanese and international companies, and development of value-added applications and services by Taiwanese firms. According to estimates, a supply chain for the emerging semiconductor industry can drive the sector's production value to NT$46.8 billion (US$1.6 billion) by 2025, with the output of derivative applications worth NT$400 billion (US$13.4 billion). For the next-generation communications industry (including new infrastructure for open 5G networks), forecasts for 2025 put the production value at NT$570 billion (US$19 billion). For Taiwan's AI solutions industry, production value is expected to reach NT$360 billion (US$12 billion), with added value from industrial adoption of AI likewise reaching NT$750 billion (US$25 billion) by 2025.