Taiwan: MAJOR INDUSTRIES
The major industries in Taiwan are electronics, crude oil refinement, armaments, chemicals, fabrics, Fe and steel, machinery, cement, nutrient processing, vehicles, consumer merchandises, pharmaceuticals.
We can hold a expression at the major industries one by one and so make an analysis on the investing chances on one of them.
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Taiwan has genuinely emerged as a planetary leader in the semiconducting material and microelectronics industry and serves as the place of the universe ‘s top IC metalworkss, Taiwan Semiconductor Manufacturing Corporation ( TSMC ) and United Microelectronics ( UMC ) , which hold a bulk of the market portion.
Taiwan is besides an of import participant in Mask ROM production, IC packaging and IC testing, accounting for 57.1 % , 32 % and 36 % of planetary market portions severally. Taiwan-based Advanced Semiconductor Engineering Inc ( ASE ) and Siliconware Precision Industries ( SPIL ) lead the IC packaging industry, while ASE Test and ChipMOS Technologies lead the IC testing industry.
Taiwan ‘s IC design industry has ranked 2nd merely to the US, accounting for 28.4 % of the market worldwide. Media Tek, VIA, Realtek and Sunplus are among the top 20 IC design houses. Taiwan ranks as the universe ‘s 3rd largest shaper of DRAM constituents, providing 17.1 % of the market. Taiwan besides serves as a cardinal IC market, with a value of US $ 11 billion in 2002, stand foring 25.7 % of the market in Asia and 8.1 % of the planetary market.
Competitive Advantage and Market Strengths
Taiwan plays a major function in the planetary semiconducting material industry, as the alone construction of its IC industry Fosters close cooperation among diverse yet indispensable elements in the value concatenation, runing from IC design and fabrication to packaging and testing.
Investing Opportunities and Market Potential
The National Si-Soft Project was launched in 2003 in an attempt to upgrade Taiwan ‘s IC industry from chiefly contract fabrication to R & A ; D and invention oriented production. The undertaking aims to do Taiwan the one-stop store for IC designs, mix-and-match rational belongingss, fabrication, and proving.
The National Si-Soft Project is devoted to developing System-on-Chip ( SoC ) substructure in Taiwan. Specific contents of the Si-Soft Project include mechanization package, silicon rational belongings ( IP ) , embedded package, and system individual bit, which are all indispensable in IC design. New IC designs will in bend drive the development of information family contraptions, photoelectricity, cyberspace engineerings, energy, communicating, biological french friess, and nanotechnology.
The undertaking offers assorted benefits such as:
- Supplying available IP beginnings and a more simplified dealing flow for the IC design industry ( including design services ) , in order to diminish the clip required for IC design.
- Bettering the fight of practicians in the system industry as they realize the system knowhow in their ain SoC
- Efficaciously cultivating star IP sellers in the IP industry
- Attracting more clients with value-added merchandises ( more complete IP characteristics ) for bit makers
- Leting practicians in the packaging and proving industries to substitute freely and larn about the most advanced engineerings relevant to their field in order to foster heighten their technological expertness
DISPLAY AND OPTOELECTRONICS
Taiwan has seen important growing in its colour imagination ( CI ) industry in recent old ages. The overall production value of the level panel show ( FPD ) industry entirely has increased more than twofold since 2001, numbering US $ 7.39 billion, of which 83.4 % came from the production of big size TFT-LCD units. In Q1 2004, the island ‘s Flat Panel Display ( FPD ) gross revenues reached NT $ 171.3 billion ( US $ 5.1 billion ) , a 115 % addition on the old twelvemonth, and 2004 gross revenues are projected to make NT $ 727.1 billion ( US $ 21.7 billion ) . As Taiwan makers are positioned to get down mass production on following coevals panels ( 6th, 7th, and 7.5 ) , the entire production value of Taiwan ‘s FPD industry will excel NT $ 1 trillion. Taiwan is presently expected to account for 41 % of large-sized TFT-LCD panel supply in 2004, going the universe ‘s largest production base.
Major TFT-LCD shapers in Taiwan, such as AU, Chi-Mei, CPT, QDI, Hannstar, Toppoly, and PVI, have contributed greatly to the advancement of the CI industry. AU, which receives the bulk of its support from Taiwan, is the 3rd largest panel provider in the universe, and is the largest manufacturer in Taiwan. Chi Mei, the 2nd largest manufacturer in Taiwan, is fast nearing AU in footings of production value.
Competitive Advantages and Market Strengths
Over 30 % of the cardinal constituents for FPD, such as polarizers, backlight faculties, colour filters and driver ICs, are manufactured in Taiwan, and local constituent shapers such as Optimax ( polarizers ) , Forhouse and Radiant ( backlights ) , Allied Material Technology, Cando and Sintek ( colour filters ) , Novatek and Winbond ( driver ICs ) , work really closely with panel shapers. These constituent and finished merchandise makers are clustered around the Taoyuan, Hsinchu, and Tainan countries, making an integrated supply concatenation that farther strengthens Taiwan ‘s place in the planetary IT industry.
Investing Opportunities and Market Potential
As Taiwan is the universe ‘s 2nd largest manufacturer of panels and the market for constituents is rather big, the authorities is ask foring foreign providers of stuffs and equipment to construct mills in Taiwan, to enable faster and more effectual merchandise and service bringings.
Panel shapers in Taiwan program to set up G5 and G6 production lines, with the end of going the prima panel provider in the universe. The authorities aims to bring forth US $ 40 billion in FPD production value by the twelvemonth 2006. In the following three to four old ages, enterprises specialising in advanced constituents will hold ample infinite for high growing potency.
The authorities offers investors in the colour imagination industry particular revenue enhancement decrease and investing inducements. Combined with a extremely skilled work force and abundant experience in the IT industry, Taiwan is the ideal finish for investing in the colour imagination industry.
Foreign Direct Investments in Taiwan
The colour imaging industry in Taiwan has grown really quickly in the past few old ages. In visible radiation of an increasing demand for level panels in the planetary market and strong competition, Taiwan ‘s sellers realize the importance of bettering their engineering and bring forthing the right key constituents. The cost ratio for TFT-LCD constituents is rather high, with colour filters at around 26 % and glass substrate near 4 % . Taiwan ‘s authorities has been active in beging foreign investors to fabricate these cardinal constituents in Taiwan.
BIOTECHNOLOGY AND PHARMACEUTICALS
Taiwan ‘s conjunct policy attempts to develop research, development and production capablenesss in the biotech sector have paid off in making a wealth of investing chances. Biotech research at Taiwan ‘s top academic establishments is deriving international attending, while development capablenesss, fostered through joint industry and authorities support, are turning these research accomplishments into commercially feasible merchandises. Taiwan ‘s mature production and logistics capablenesss, evidenced by its over 100 cGMP-awarded pharmaceutical makers, have been widely recognized as human dynamos in this country.
Goals for the Coming Decade
Having established a solid foundation, the Taiwan authorities has designated the biotechnology industry for farther development into a cardinal industry in its Two Million, Twin Stars Plan and Challenge 2008 National Development Plan. Through the combined attempts of authorities, academe, research and industrial sectors, Taiwan is poised to go a major hub and logistics operations centre for R & A ; D, fabrication, and operations in the biotechnology and pharmaceutical industries within the Asia-Pacific part. The authorities ‘s programs to advance the industry include accomplishing marks of NT $ 150 billion ( US $ 4.34 billion ) in investings and 25 % one-year gross growing by 2008 and five hundred biotech-related companies within 10 old ages.
Competitive Advantages and Market Strengths
- Superior pharmaceutical production and fabrication capablenesss
- Geographically positioned near to possible markets in Asia allows for enhanced merchandise development for Asiatic markets
- Excellent springboard for come ining other Asiatic markets
- Ease of communicating and decreased cultural barriers
- Strong venture capital and fiscal resources
- Abundance of proficient specializers in organic chemical science, optoelectronics, integrated circuitry, automated systems, and other relevant Fieldss
- Excellent research installations and well-staffed health care organisations
Taiwan offers much possible in the telecommunications market, with one of the most advanced telecommunications webs in the part. High incursion rates in both the fixed-line and nomadic phone sectors have encouraged growing in telecom merchandises and services. Looking to 2004, the Ministry of Economic Affairs has announced programs to do the telecommunications industry one of Taiwan ‘s “ trillion dollar ” industries, which will foster the development of radio applications, 3G, and broadband services.
Competitive Advantages and Market Strengths
Taiwan is presently the 4th largest manufacturer of PCs. As PC-related IC design and fabrication engineering in Taiwan have reached universe criterions, wireless communicating and broadband communicating merchandises, related components/assemblies and systems merchandises fabricating engineering have all been the donees of a multiplier consequence.
A turning figure of Taiwan makers boast fabrication and selling capablenesss for research and development of xDSL, DLC, SDHH, DWDM, and cell-phone related merchandises. If these are combined with telecommunications service capablenesss of foreign companies, peculiarly in the country of content services, their ability to come in freshly developing markets will certainly excite a new moving ridge of merchandise demand.
Taiwan ‘s first technological advantages enable it to profit from US and Japanese R & A ; D resources. Taiwan ‘s cardinal location in the Asian Pacific part provides ideal entree to the emerging Mainland China and Southeast Asiatic markets and to fabricate highly-competitive communications engineering merchandises. For makers progressing into freshly developing markets, Taiwan remains the most advantageous base for concern operations in the part.
Investing Opportunities and Market Potential
In order to set up Taiwan as a broadband communications engineering island, the authorities has classified telecommunications as a strategic industry, leting it to profit from a host of investing and revenue enhancement inducements.
The Related Industries Promotion Plan is expected to ease the constitution of communication-oriented SoC IC design, fiberoptic components/assemblies, production installations, package and telecommunications service industries invention. IT merchandise fabrication is expected to make its end of exceling US $ 30 billion by 2007.
At the same clip, in order to follow with telecommunications industry liberalisation and national substructure demands, Taiwan has in recent old ages bit by bit liberalized the 3G and wired web markets. Estimates for 2005 anticipate US $ 50 billion in equipment purchase orders and US $ 20 billion in telecommunication service industry grosss. Market chances are enormous, doing Taiwan the ideal investing finish for the equipment fabrication industry and content service suppliers.
MATERIALS AND FINE CHEMICALS
The production value of the stuff and all right chemical industry in Taiwan has averaged about US $ 44.38 billion yearly, with petrochemical stuffs, polymer, electrical stuffs and all right chemical merchandises as major end product. Taiwan is the largest manufacturer of ABS, the 2nd largest provider of PTAs, and the 4th largest in PVCs, providing the Taiwan domestic market and the universe ‘s major markets, particularly Mainland China.
With a well-developed provider concatenation and selling channels all over the universe, Taiwan plays a cardinal function in many markets today. In fact, a turning figure of taking companies, such as Chi-Mei, Nan Ya Plastics and Formosa Plastics in the stuff industry, and UPC, Dahin, Lee Chang Yung Chemical in the all right chemical industry, are emerging more visibly in the international markets. In add-on, Eternal Chemical and Chang Chun Plastics in the electrical stuff industry, and Taiwan Shiseido, Grand Glory Biotechnology, Taiwan Sugar, and Taiwan Salt in the cosmetics industry are already well-established in their several markets.
As the IT industry becomes more competitory, Taiwan ‘s stuff and all right chemical industry has been concentrating on semiconducting materials, plane show stuffs, print circuit boards, nanotechnology stuffs and other high value-added merchandises.
Investing Opportunities and Market Potentials
Taiwan is home to a great figure of gifted R & A ; D and design people who are knowing and possess experience with international companies, doing the island more advantageous location for transnational companies to place as portion of a globalisation scheme.
In recent old ages, Taiwan ‘s IT industry has shown impressive advancement – the semiconducting material, TFT-LCDs, and print circuit board industries are seeing dramatic growing and hold reached large-scale production degrees, thereby deriving strength in the international markets. The stuffs and all right chemical industry in Taiwan will be extremely indispensable in back uping the IT industry and run intoing its strict demands. The Challenge 2008 National Development Plan, a government-support undertaking that shows a list of programs and inducements on land rental, support, revenue enhancements, and other benefits, demonstrates the value that the stuffs and all right chemical industry brings to Taiwan.
Taiwan has created huge chances for both international and domestic houses, with Mainland China as the biggest and most outstanding market. With its strategic geographical location and experience in universe trade, Taiwan makes the ideal centre for fabricating and market development in the Asia-Pacific part.
FINANCE, SECURITIES AND INSURANCE
With foreign exchanges militias of over US $ 200 billion at the terminal of 2003, and a forecasted 4.5 % economic growing rate for 2004, Taiwan continues to keep a robust economic system, due in portion to authorities action on internationalisation and liberalisation policies.
Competitive Advantages & A ; Market Strengths
As a turning figure of planetary industries are migrating to the Far East, Taiwan is an ideal location to set up a fiscal base. Multinational companies in Taiwan have entree to more precise information on the Asia-Pacific part as they expand their concern.
In recent old ages, East Asia has become an of import investing location for European and American states. Taiwan ‘s stock market index is covered in both Dow Jones ‘ and Morgan Stanley ‘s stock indices, to the benefit of foreign investors. In add-on, the authorities has loosened limitations on foreign capital in the Taiwan stock market, conveying more attending to Taiwan ‘s market.
Investing Opportunities and Market Potential
In prosecuting its end of going the fiscal centre of East Asia, Taiwan is revising its fiscal policies to convey them to international criterions. Examples of such policies include:
Raising restraints on offshore banking units ( OBUs ) — Policies include spread outing the deepness and comprehensiveness of foreign currency market, and broadening the offshore banking units market and foreign currency nightlong rate market to pull foreign fiscal establishments and enhance Taiwan ‘s place as a regional support centre. Taiwan will therefore spread out its stock and bond markets, better market ordinance and efficiency, and advance the internationalisation of the securities market. Foreign investors can purchase and sell securities, bonds and public warrants freely without limitations of clip or location, have more versatility in pull offing investings, and vitalise the market.
Ongoing liberalisation of capital markets for foreign investors — the ROC authorities has opened up its stock market to foreign investors with minimum limitations. With the debut of more fiscal trade goods in the market and more diversified channels for financess, Taiwan ‘s capital markets are opening to increasing foreign investors, who are now allowed to pull off derivative fiscal merchandises alternatively of topographic point trade goods. In add-on, foreign capital is now permitted in the private arrangement market, and these freshly available trade goods are pulling more foreign investing.
Opening the insurance market to foreign investors — Fifty-five insurance companies are presently in operation in Taiwan, of which 21 are foreign-owned. Other steps to liberalise the Taiwan insurance market include: restful limitations on the blessing of trade goods ; liberalized rates ; investing policies and processs ; the gap of cross-strait insurance exchanges ; the publicity of risk-based capital ( RBC ) systems ; information revelation systems ; and a certified actuary system. With monitoring of all foreign insurance companies in Taiwan to guarantee conformity with policies on wage for Taiwan citizens, the foreign insurance industry in Taiwan can run in a just and sensible concern environment. In add-on, with the island ‘s first-class location and work force, Taiwan has the possible to go the Asiatic insurance market hub for foreign investors.
Increasing the liquidness of fiscal capital in the stock market — The Securitization of Financial Assets Law was implemented on July 24, 2002, with the purpose of bettering and increasing the liquidness of fiscal assets, including to the full liberalized foreign investings in the public and private arrangement of securitization of fiscal assets. Several domestic Bankss are in the procedure of collaborating with foreign fiscal establishments in this respect.
Harmonizing to the regulations for MFN and National Treatment, foreign invested Bankss in Taiwan can vie on an equal terms with domestic Bankss. They are all given licences and can run as fully-functional subdivisions in Taiwan. In add-on, as stated in the Banking Law and Financial Holding Company Law, a foreign fiscal establishment may put up to a 100 % interest in a domestic bank. Furthermore, foreign Bankss and fiscal keeping companies that have sufficient experience and a good repute can keep portions of up to 100 % under their original name.
Foreign fiscal groups may unify with Taiwan ‘s local fiscal establishments under the Merger Law for Financial Institutions, which has been established for the intent of modulating the amalgamation of fiscal establishments, spread outing economic systems of graduated table, heightening the efficiency of fiscal establishments and protecting proper competition environments. The jurisprudence provides a friendly legal environment and mechanism for the operation of Asset Management Companies.
Flexible authorities limitations allow foreign investors to put up their operations central offices in Taiwan to carry on many-sided trade – a turning tendency for foreign companies to derive a more competitory border.
Analysis OF THE TAIWANESE BIOTECHNOLOGY SECTOR
Taiwan ‘s biotechnology industry includes biotechnology, pharmaceuticals and medical devices. In 2003, the entire one-year gross for these industries in Taiwan was about NT $ 131.6 billion, of which NT $ 29.6 billion came from biotechnology — 0.9 per centum of the entire planetary revenue-represented by 223 companies, each with an mean gross of NT $ 133 million. Business range covered included genomics, drugs, nosologies, agricultural biotechnology, environmental biotechnology, protein drugs, contract research organisations, biochips and bioinformatics.
The island ‘s pharmaceutical industry returned NT $ 61.4 billion, — 0.4 per centum of the planetary sum — with 429 companies active in this sector, averaging NT $ 143 million per company. The medical devices industry returned NT $ 40.6 billion, — 0.6 per centum of the planetary sum, coming from 397 companies, with an mean gross of NT $ 102 million each. The biotechnology work force size is 35,610, of which 7,200 are in the biotechnology industry, 14,224 in the pharmaceutical industry and 14,186 working in the medical devices industry.
Status of Biotechnology Development in Taiwan ( 2003 )
Unit of measurements: NT $ 100 million
Industry Biotechnology Pharmaceutical Medial devices TotalGross 296 614 406 1,316 Number of Companies 223 429 397 1,049 Size of work force ( figure ) 7,200 14,224 14,186 35,610 Export value* 113 45 288 446 Import value* 120 339 425 884 Domestic gross revenues vs. export 62:38 93:7 29:71 66:34 Domestic market demand* 303 908 543 1,754
BIOTECH INDUSTRY ANALYSIS: MICHAEL PORTER ‘S FIVE FORCES MODEL
Advantages and chances in Taiwan ‘s biotech industry
1. Active and uninterrupted attempts to construct up an attractive investing environment by the authorities
2. Large input to investing of up- and mid-stream R & A ; D and substructure
3. Close bond with fast turning Asiatic markets
4. Sufficient domestic capital for puting from intensive spouses
5. Solid foundation and experience from the past development of the electronics industry
6. Proper environment for the development of small- and moderate-sized endeavors ; and the diligent and aggressive entrepreneurial spirit of the Chinese
7. Ample biotechnology and pharmaceutical professionals based both locally and overseas
8. Relatively homogeneous cultural Chinese population, ideal for the development of an Asian-prevalent-disease-related biotech industry
9. Qualified R & A ; D forces who are capable of set uping a cognition economic system to reflect Taiwan ‘s singularity
10. Advanced traditional agricultural engineering to back up development of agricultural biotechnology
1. The cardinal industry in the authorities ‘s Challenge 2008 six-year national development program
2. The listed inducement industry among freshly encouraged emerging strategic industries
3. Rising demand in better life criterions in the Asia-Pacific ; and turning economic system and market for possible development
4. Increasing figure of strategic confederations and engineering transportation instances
5. R & A ; D and preciseness processing sectors are ready to take advantage of the turning planetary tendency towards outsourcing in the biotechnology industry.
6. Right timing for eternal concern chances in station human cistron decrypting
7. High value-added, long life rhythm and value concatenation of biotechnology ; many points of entry available, from R & A ; D to selling
8. Booming biotechnology R & A ; D service industries ( proficient rating, R & A ; D design, rational belongings services, and start-up incubation services )
9. Many large-sized high-quality medical centres, supplying optimum conditions for set abouting clinical tests
10. Clear market cleavage from temperate zone merchandises of advanced states with Taiwan ‘s sub-tropical clime to develop Asiatic sub-tropical agricultural biotechnology
11. Plentiful related information aggregated from National Health Insurance plan
12. Diseases associated with a modern sedentary life style, with possible for drug and disease testing engineering platforms Objective.
1. Although there are a few biotech companies but all of them are little graduated table operators. Hence a consolidation programme can be started.
2. Since biotech is traveling to assist pharmaceutical companies in a large manner hence drug company companies can do a witting attempt to get down R & A ; D centres with accent on biotechnology.
3. Although the authorities is supportive of the sector but non many FDI ‘s have been invited. The authorities can specifically ask for FDI ‘s in this sector.
4. Large companies like Biocon and Brighton Research labs should be asked to put up installations. They can be promised entree to markets in mainland China through Taiwan.
5. Most of the natural stuffs required is being imported, so the authorities can invent schemes to develop subsidiary industries and do the sector ego sufficient.
6. Newer and more ambitious subjects can be taken up to analyze. Like human genome sequencing which would assist in finding the familial causes for diseases like malignant neoplastic disease and AIDS.