Taiwan Stops Becoming Hollow with IT

Industrial void arisen owing to an advance of manufacturing companies into the China mainland will be filled up with an advanced technology industry such as a semiconductor, LCD and software. According to `Kyodo News` on August 27, the Taiwanese government has taken a policy for foreign talents and intensive investment on advanced technology industry for an economic development plan up to 2008.

▽Sharp reduction in foreign investment 〓 the Taiwan which made a minus growth last year, has made the plus growth owing to a recovery of the semiconductor market for the first and second quarter. However, under the investment boom to China, the foreign direct investment on Taiwan from January to July, decreased by 47% over the same period of last year. The future prospect of Taiwan is very uncertain.

According to Information Industry Association of Taiwan, the Taiwanese production of desktop PC is 15%, but the Chinese production reaches 55%. Also, the Taiwanese production and Chinese production of a motherboard is 39% and 60% respectively. In terms of the LCD monitor production, the Taiwan and China records 29% and 61% respectively. In all products related to IT except a notebook PC, the Chinese production exceeded the Taiwanese production. As Taiwanese companies have gone to China mainland, the unemployment rate in Taiwan was raised to 5%.

▽Positive Attraction of Multi-national Companies 〓 The Taiwanese government plans

to attract the head office of international multinational companies and local headquarter

to fill up the industrial blank. The Ministry of Economic Affairs of Taiwan decided to

attract the head offices of 200 international multinational companies until 2011, and has

induced an establishment of 1000 local headquarters.

Taiwanese government will plan to perform a variety of tax supports such as an income tax exemption. The chief of industrial development bureau, Ministry of Economic Affairs said, “There are 23 multinational companies which adopt the application form for the establishment of local headquarter and head offices. Also, there are 80 multinational companies which are interested in Taiwan as a suitable place of the local headquarter and head office.”

This strategy is required to develop the Taiwan as an assembly place for the head offices of international multinational companies and obtain the basis of the high value-added industry.

ljhzip@donga.com