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Key Industries

半導體

  • 日期:2021-09-17
半導體

Source: Industrial Development Bureau, MOEA

Last Updated on: 2020.9.30

I. Policy Initiatives

Taiwan has a comprehensive semiconductor industry cluster and is the world's densest and most technologically advanced semiconductor production base. Semiconductor manufacturing has been listed as a key industry for national development with the aim of upgrading the industry, achieving an innovative economy, and grasping developmental opportunities in the digital age.

The current semiconductor policy of Taiwan calls for the development of smart chips in combination with artificial intelligence (AI) applications to establish the critical technologies needed by industry for smart system applications. The government has already prioritized "IC design and pioneering semiconductor technologies" in its technology policy. Taiwan's strengths in the semiconductor industry will continue to be leveraged in support of the innovative industries such as green energy, smart machinery, agriculture, biomedicine, and electric vehicles.

Fig.1 The overall structure of Taiwan's semiconductor industry

 

II. Overview of Industrial Development

1. Convenient Transportation Infrastructure

Traveling within Taiwan is very convenient. It takes only 90 minutes to travel from the north to the south by High Speed Rail, facilitating prompt technical support.

2. Comprehensive Industry Clusters

Taiwan has a complete upstream-downstream IC industrial chain that reaches from upstream IC design through IC manufacturing to final IC packaging and testing, in a professional division of labor model that is unique in the world. In 2019, Taiwan’s semiconductor industry chain was worth NT$2.67 trillion (US$86.3 billion), making it the second largest in the world after the U.S.  Furthermore, a comprehensive chain of interconnected industry clusters stretching from Hsinchu to Taichung and Tainan, facilitates the joint development of advanced processes.

 

Figure 2  Semiconductor industry clusters in Taiwan

 

3. An International Leader in Semiconductor Processes

The semiconductor industry in Taiwan is ranked first in the world by market share in both the IC foundry industry and the packaging & testing industry. In the IC design industry, it is ranked second.

The semiconductor industry in Taiwan is characterized by vertical integration and industry clustering. A unique production model gives Taiwan production advantages such as flexibility, quickness, customized service, and low costs. In terms of industry structure, the IC design industry accounts for 26%, the foundry industry accounts for 49%, the IC packaging & testing industry accounts for 19%, and the memory industry accounts for 6%. In terms of global market share, the foundry sector has been the most outstanding performer with a global market share of over 70%. Taiwan Semiconductor Manufacturing Company (TSMC) is Taiwan's best-known manufacturer and the undisputed world leader in the foundry sector with more than half of the global market share in 2019. Other key companies include MediaTek in the IC design sector, Advanced Semiconductor Engineering, Inc. (ASE) in the IC packaging and testing sector, and Nanya Technology Corp. in the memory sector. The output value of Taiwan's semiconductor industry is forecast to increase by 5.5% and reach NT$2.81 trillion in 2020.

Fig. 3  Output Value of Taiwan’s Semiconductor Industry, 2000~2020

 

III. Investment Opportunities

1. Joining the core cluster of the global semiconductor industry

Taiwan is home to the most complete semiconductor industry clusters and specializations in the world. The semiconductor industry is regarded by the government as a cornerstone of Taiwan’s industry development. Every effort will be made to support the development requirements of the semiconductor industry, including the provision of related incentives. It is hoped that foreign companies can form technical partnerships with Taiwanese businesses to accelerate the development and application of semiconductor industries, and work together to build a new future for Taiwan's semiconductor industry.

 

2. Continuous Growth of Demand for Semiconductor Materials

Due to its large number of foundries and packaging plants, Taiwan has been the largest consumer of semiconductor materials in the world for 10 consecutive years. Total market value reached US$11.3 billion in 2019. As the output value of Taiwan's IC industry continues to grow, the demand for new materials and equipment will continue to grow as well.

      Business opportunities in semiconductor materials:

The high-performance photoresists, metal target materials, coating agents, and specialty reactive gases used in IC production processes as well as wire bonding, molding, and filling materials used in IC packaging by Taiwan are currently all imported from overseas. IC companies are hoping that international vendors can produce those materials in Taiwan instead to reduce the supply risk. In addition, 5nm and 7 nm IC production processes have now entered mass production in Taiwan while a 3nm process is now under active development, as well. Greater cooperation with foreign vendors on high-performance IC production and packaging materials is therefore desired.

 

3. Continuous Growth of Demand for Semiconductor Equipment

In terms of investment in semiconductor equipment, Taiwan will remain the world's largest market due to investments by semiconductor vendors such as TSMC, Winbond, and Micron. Total financing demand is expected to exceed US$15 billion. Taiwanese vendors are now capable of supplying equipment for conventional packaging processes and components for some wafer production equipment. Nevertheless, they hope to cooperate with international upstream equipment vendors on advanced packaging equipment and equipment for 12" wafer processes and work together in the future.

     Business opportunities in semiconductor equipment:

 (1) Front-end wafer production equipment: Deposition technology, dry etching technology, DUV and EUC exposure technology, photoresistor coating and developing technology, chemical-mechanical polishing technology.

(2) Advanced packaging process equipment: Exposure technology, copperplating technology, deposition technology, dry etching technology.

 

4. Seizing the business opportunities of new technologies and products

IoT, AI, 5G, industrial and service robotics, smart city initiatives, smart lifestyle product, automotive electronics and high-speed computing applications all require the support of the semiconductor industry and their future growth potential is considerable. Foreign companies can use investments and partnerships in Taiwan to develop emerging business opportunities from new technologies and products.

 

5. Tapping into the fast- growing Asia market

Taiwan's advanced semiconductor production technology, as well as its unique vertically integrated industrial structure, offer more than just a complete industry chain that runs from upstream IC design to downstream packaging & testing. It is also a home for world-leading enterprises which can provide foreign companies with high quality service and manufacturing capacity. Taiwan is also located at the heart of the fast-growing Asia market, making it the perfect place to explore regional business opportunities.

 

IV. Investment Incentive Measures

1. Tax incentives

(1) Taiwan’s profit-seeking enterprise income tax rate is 20%

(2) Up to 15% of the company’s R&D expenditures may be deducted from its profit-seeking enterprise income tax for current year.

(3) Royalty payments to foreign companies for imported new production technologies or products that use patents, copyrights, or other special rights owned by foreign companies is, with the approval of the Industrial Development Bureau, MOEA, exempt from the corporate income tax.

(4) Imported machinery which local manufacturers cannot produce are eligible for duty-free treatment.

2. Subsidies

(1) The Global R&D Innovation Partner Program

Some foreign companies have a high degree of complementarity with Taiwan's industries. To encourage them to engage in R&D and innovation activities in Taiwan, such companies, after gaining approval from the MOEA, will be eligible for subsidies of up to 50% of total R&D expenditures if they: a. have technologies that are not yet mature in Taiwan or overseas, and could create strategic products, services, or industries over the course of future industrial development; b. have potential to help Taiwan produce leading technologies or significantly enhance the competitiveness and increase the added value of important industries; or c. engage in key and common technology R&D, vertical or horizontal technology integration, and can create an industrial value chain.

(2) Integrated R&D Program

Companies, once approved by the MOEA, will be eligible for subsidies of no less than 40% but no more than 50% of total project funding if they: a. engage in key and common technology R&D, vertical or horizontal technology integration, and can create an industrial value chain; b. establish industry standards, protocols, or platforms; or c. establish applications, services, and innovative business and marketing models with technological content, and increase industry's added value.

(3) Taiwan Industry Innovation Platform Program

The MOEA Industrial Development Bureau and the Ministry of Science and Technology are jointly implementing the "Taiwan Industry Innovation Platform Program" to guide industries to develop towards greater value, and to encourage companies to enter high-end product application markets to increase industry's overall added value. For companies owning R&D teams in Taiwan, the program provides 40-50% of the funding required for theme-based R&D projects, and up to 40% of funding for R&D projects proposed by the companies themselves.

 

V. Major Foreign Investors in Taiwan

On the semiconductor equipment side, ASML from Netherland, as well as Applied Materials and Lam Research from the U.S., have all set up R&D centers or training headquarters in Taiwan. On the electronic materials side, Merck from Germany , Shin-Etsu Chemical and Tokyo Ohka Kogyo from Japan, as well as DOW Chemical and Cabot Microelectronics from the U.S., have all built new plants or expanded their operations in Taiwan. Key vendors such as Micron and Qualcomm have all continued to increase their investments in Taiwan, as well.

 

 

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