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Key Industries

物聯網

  • 日期:2020-08-01
物聯網

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

 

I. Policy Initiatives

1. Asia Silicon Valley Development Program

Taiwan's government began implementing the Asia Silicon Valley Development Program in 2016. The plan has two themes: "promoting IoT innovation and R&D" and "strengthening the innovative entrepreneurial ecosystem." The plan aims to link together advanced technology R&D capabilities, world class talent, capital, and markets worldwide, leading the way for a new economic development model and driving the comprehensive transformation and upgrading of Taiwan's industries through the IoT.

2. Specific promotion strategies

As for specific promotion strategies, Taiwan established the Major League IoT, ASVDP and the Hutoushan Innovation Hub in Taoyuan City; relaxed talent-related regulations; and provided funding to build a demonstration site, which brings in international R&D capabilities to create a robust innovative entrepreneurial ecosystem for IoT innovation and R&D.

 

II. Overview of Industrial Development

1. Production Value

Under the collective efforts of the public and private sectors, the output value of Taiwan's IoT industry grew from US$27.7 billion in 2016 (accounting for 4.02% of global output value) to US$39.1 billion (approx. NT$1.17 trillion) in 2018, surpassing the NT$1 trillion mark for the first time and accounting for4.24% of the global output value (Figure 1).

Production value of Taiwan's IoT industry in 2016-2018

                                                                                           Figure 1 Production value of Taiwan's IoT industry in 2016-2018

 

2. Industrial Clusters

The IoT industry spans the IT manufacturing industry, equipment manufacturing industry, and software and information service industry, and involves multiple fields of technology, including computers, communications, networking, computing, sensors, embedded systems, and microelectronics. Due to the extensive fields involved in the IoT industry, the industry has not formed a specific industrial cluster, but rather exists in the form of test sites developed based on local demand and industrial development (Figure 2).

IoT demonstration site in Taiwan

                                                                                                 Figure 2  IoT demonstration site in Taiwan

 

III. Investment Opportunities

1. Utilizing Taiwan's dominant industries to develop innovative IoT applications

Taiwan has a complete semiconductor supply chain, an abundance of engineering talent for R&D and design, and is close to emerging markets in Asia. System application/assembly companies in the ICT industry are recognized by international brands for their manufacturing ability. The companies have recently expanded beyond conventional 3C (computer, communications, consumer electronics) into vertical IoT applications and system integration solutions. Through investing in Taiwan, foreign companies are able to increase the depth of their partnership with Taiwan's semiconductor and ICT industries, implement high-end parts/components/ software design and development technologies, and find module, subsystem, and application developers with whom they can work and jointly develop targeted vertical application markets.

2. Joint development of key sensor technologies for the IoT

The IoT framework consists of a sensor layer, network layer, and application layer. Sensor technologies in the sensor layer play a crucial role, not only involving the integration of hardware sensor components/ circuit design and integration, but also software technologies for integrating multiple sensor signals and special algorithms for integrating AI/edge computing. Foreign companies that invest in Taiwan can invest in optical/3D vision sensors, biomedical sensors, or gas sensors for environmental/food safety. They can partner with smart vehicle and smart manufacturing test sites in Taiwan to jointly develop key sensor technologies that meet demands particular to the Taiwan/Asia market.

3. Reducing the risks and costs derived from changes in the international trade situation

Network information security and government control policies are important factors that will affect the development of the IoT industry at the location where an investment is made. Taiwan is deeply trusted by international corporations due to complete regulations that fully protect intellectual property rights and information security. Next, Taiwanese companies are fully aware of trends in the global industry, and flexibly adjust their supply chains based on changes in the international economic and trade situation. Foreign companies that invest in Taiwan or partner with Taiwanese companies will be able to reduce the risks and costs brought about by the U.S.-China trade and technology conflicts.From Apr, 2017, Taiwanese government plans to invest US$120 million to promote the "4G Smart City application & Service Program" in four years.

 

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.

(4) Asia Silicon Valley smart business service application and promotion program: The Ministry of Economic Affairs (MOEA) provides subsidies to assist the innovation and development of Taiwan's commercial service industry, strengthening its growth momentum and enhancing its competitiveness. The subsidies encourage companies to develop new commercial service models and expand the scope of services through smart technology and mobile technology applications, developing innovative services that are smarter and more convenient. Subsidies were provided to the retail industry and integrated service industry in 2019. For qualified applicants, the subsidies may not exceed 50% of the total budget of each proposal (includes subsidies and self-raised funds), and the maximum subsidy is limited to NT$5 million. Furthermore, the self-raised funds portion must be lower than the company's paid-in capital.

 

V. Major Foreign Investors in Taiwan

1. The cloud computing service platform of Amazon – Amazon Web Services (AWS) is optimistic about Taiwan's flourishing innovation capabilities, complete industrial supply chain, and abundance of technology talent, and therefore established the New Taipei City-AWS Joint Innovation Center in New Taipei City in 2018. It further announced that the first AWS IoT Lab in Greater China will be established in Taipei in 2019, and AWS Partner Network (APN) will help customers accelerate the design and deployment of IoT applications. Current partners include the Industrial Technology Research Institute, SoftChef, QNAP Systems, CEC, LiteOn, and Sinomos.

2. Microsoft teamed up with startups in Taiwan and its partners in the industry in the development of smart city applications, such as working with Osense Technology, an AR startup in Taiwan, and BTS, the largest railway group in Thailand, to make rail stations a destination for tourists and citizens through precision positioning and AR technology.

 

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