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Key Industries


  • 日期:2021-05-01

Source: Industrial Development Bureau, MOEA
Last Updated on: 2019/09/30

I. Policy Initiatives

1. Semiconductors

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.

2. Expansion of Cross-discipline Cooperation of Semiconductors

Semiconductor chips are the common foundation on which the 5+N innovative industries are based. As the link that connects the 5+N innovative industries with the IoT, they require chip design and semiconductor technologies. Taiwan hopes to guide the semiconductor industry in expanding from consumer electronic products into cooperation in innovative industries such as green energy, smart machinery, agriculture, biomedicine, and electric vehicles. Semiconductors, therefore, are listed among the 10 major industries in the 2018 industrial innovation R&D plan.

The overall structure of Taiwan's semiconductor industry

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 2018, the Taiwan semiconductor industry chain was worth NT$2.62 trillion (US$86.8 billion), making it the third largest in the world after the U.S. and Korea. Furthermore, a comprehensive chain of interconnected industry clusters stretching from Hsinchu to Taichung and Tainan facilitates the joint development of advanced processes.

3. An International Leader in Semiconductor Processes

Taiwan ranks number one globally in OEM wafer production, with advanced process technologies that have entered the 14 nm and 10 nm realms and solidify the island's standing as a world leader. Taiwan's IC packaging and testing industry also ranks number one, with more than half of the world's top-10 IC packaging and testing companies. Years of development have fostered a great number of dedicated professionals with mature technology, making it easier for international companies to develop their business and establish positions of world leadership in Taiwan.

4. Continued Expansion of R&D Resources

Taiwan's IC industry continues to invest resources in R&D, enabling it to lead global semiconductor technology to new heights of achievement. In addition to establishing autonomous semiconductor technologies, the industry is able to shorten the lead time for the mass production of high-tech semiconductor products through the international technological cooperation model.

               The semiconductor industry clusters in Taiwan

Fig.2 The semiconductor industry clusters in Taiwan

Production value of Taiwan semiconductor industry between 2000 and 2022
Fig. 3  Production value of Taiwan semiconductor industry between 2000 and 2022


III. Investment Opportunities

1. Joining the core cluster of the global semiconductor industry

The complete semiconductor industry chain, production clusters and R&D capability in Taiwan will generate synergies for foreign businesses that set up R&D centers or production sites in Taiwan. The semiconductor industry is also considered a cornerstone of industry development by the government. 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 the large number of foundries and packaging plants, 2018 marked the ninth year in a row that Taiwan has been the largest consumer of semiconductor materials in the world with a total value of up to US$11.4 billion. 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-level photo-resist, 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 them in Taiwan instead to reduce the supply risk for associated materials. In addition, the 7 nm IC production process recently entered mass production in Taiwan. Greater cooperation with foreign vendors on the high-level IC production and packaging materials needed by the process is therefore desired as well. .

        3Continuous Growth of Demand for Semiconductor Equipment

In terms of semiconductor equipment investment, a weak overall outlook for the semiconductor industry in 2019 means that Semiconductor Equipment and Materials International (SEMI) only expects growth in three regions, namely Taiwan, Japan and North America. In 2018, total sales in Taiwan were estimated US$10.1 billion, and this is expected to grow to US$11.8 billion in 2019.

Business opportunities in semiconductor equipment:

Taiwanese vendors can now supply components and packaging equipment for 6 ~ 8 inch wafer processes. Nevertheless, they hope to cooperate with upstream vendors in components and advanced packaging equipment for 12 inch wafer processes so that everyone can grow together. Foreign investment is therefore welcome for:

(1) Front-end process equipment: Coating deposition control technology, etch rate consistency control, exposure DUV and EUV laser source technology.

(2) Advanced packaging process equipment: Photoresist application technology, copper electro-plating technology, laser trimming technology.

4.Seizing the business opportunities of new technologies and products

IoT, AI, 5G, industrial and service robotics, smart city, smart lifestyle product, automotive electronics and high-speed computing applications all require the support of the semiconductor industry and their future growth potential is very high. 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 unique vertically specialized industrial structure offers more than just a complete industry chain that runs from upstream IC design to downstream packaging & testing. It is also home to world-leading enterprises that can provide foreign companies with high quality service and manufacturing. 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 Incentives

1. Tax and Tariff Incentives

(1) Business income tax rate in Taiwan is 20%.

(2) Up to 15% of R&D expenses may be credited against the profit-seeking enterprise income tax payable by the company in the current year.

(3) Imported machinery that is not yet manufactured domestically may enjoy tariff-free treatment.

(4) Royalty payments to foreign companies for imported new production technologies or products that use patents, copyrights, or other special rights owned by foreign companies are, with the approval of the Ministry of Economic Affairs, exempt from the business income tax.

(5) For operators stationed in Export Processing Zones, Science Parks and Free Trade Zones, imported raw materials, fuel, materials, semi-processed goods, and machinery may be exempt from import duty, commodity tax, and sales tax. The business tax rate in such areas is zero on goods and services shipped abroad.

2. R&D Subsidies

(1) Global Innovation and R&D Partnership Plan: Subsidies are available for up to 50% of total spending by foreign enterprises on the establishment of R&D centers in Taiwan.

(2) Integrated R&D Plan: Subsidies are available for 40% to 50% of total project cost for the integration of key and cross-sector technologies.

(3) Industrial Upgrading and Innovation Program: For companies having R&D teams in Taiwan, subsidies are available for 40%-50% of project funding for projects that conform to government programs and up to 40% of funding for projects generated by the applicants themselves.


V. Major Foreign Investors in Taiwan

In the field of semiconductor equipment, there are ASML of Holland and Applied Materials Inc. and Lam Research of the USA, which have established R&D centers or talent incubation HQs in Taiwan. In the field of electronic materials there are Hsin-Etsu Chemical and Tokyo Ohka Kogyo of Japan and DOW Chemical Company and Cabot Microelectronics of the USA, which have established new plants or expanded operations in Taiwan to meet customer demand.