Auto Electronics Industry
Analysis and Investment Opportunities
Department of Investment Services, MOEA
July 2009
1
Table of Contents
I.
Trends in the Global Auto Electronics Industry……………………............3
1. Survey of the Global New Automobile Market………………………............4
2. Auto Electronics Development Trends………………………………............4
3. Status
II.
Status
of the Global Auto Electronics Market………………...........7
of Taiwan’s Auto Electronics Industry ………….............10
1. Supply and Demand of the Auto Electronics Industry………………...........10
2. Gaps in Industry Supply Chain, Investment Niches, and Prospective
Foreign Investors……………………………………………………............11
3. Major Suppliers in Taiwan………………………………………….............13
III.
Investment Opportunities for Foreign Investors….............………………16
IV.
Investment Incentives…………………………............……………………19
V.
Industry-Academia Collaboration in Taiwan………............……………23
2
Under the impact of the 2008 global financial crisis, the largest automobile
manufacturer in the United States, General Motors, declared bankruptcy and Chrysler
entered a phase of bankruptcy negotiations with the U.S. government. The amount of
U.S. government financial support for the automobile industry continues to climb and
Japan’s Toyota Motor Corporation has posted a loss for the first time in 46 years. In
such an arduous operating environment, the pace of global automotive industry R&D
continues unabated, especially efforts to introduce more and more auto electronics to
boost the energy efficiency of vehicle operation and use IT technology to achieve
seamlessly connected vehicles. Thus, auto electronics is a key tool for weathering the
global economic crisis.
Taiwan’s IT industry has accumulated considerable strenght and many of its hardware
products are unmatched for production value. Furthermore, it has engaged in creating
new value for the consumer and in upgrading via its complete IT industry supply
chain. Effective integration of auto electronics development trends will be a key
advantage for the development of Taiwan’s auto electronics industry.
I. Trends in the Global Auto Electronics Industry
Auto electronics are system products involving automobile manufacturing, electronics,
optoelectronics,
and
IT
technologies.
Key
components
include
sensors,
micro-controllers, microprocessors, driver devices, telecom components, power
supply devices, passive electronic components, and indicators. Applications include
engine/power-train systems, suspension/chassis systems, safety systems, car body
electrical systems, driver information systems, and security systems.
To satisfy new demands for saving energy, safety, comfort, and even intelligent
functions, the proportion of electronic products carried in automobiles has grown over
the years. By 2012, auto electronics will account for 40% of the total price of an
automobile, a dramatic increase of
26% over 2003, so the market potential is
obvious.
3
1. Survey of the Global New Automobile Market
The worldwide new automobile market sustained an unprecedented blow as a result of
the global financial crisis that hit during the second half of 2008, and new-car sales
for September 2008, which posted a new 15-year low. The sales volume of Toyota
automobiles fell 32%, the largest single-month drop in 40 years. Global output for all
of 2008 was 58 million vehicles; the figure will drop to an estimated 56.4 million in
2009, and is forecast to recover to the 60 million mark by 2012.
Chart 1. New Automobile Output Volume Worldwide
Unit: 1 million vehicles
61
60.6
單
位 60
：
百 59
萬
輛
58
57
59.5
58
57.8
57.4
56.7
56.4
56
55
54
2006
2007
2008
2009(e)
2010(f)
2011(f)
2012(f)
Source: Wards Automotive (May 2009)
2. Auto Electronics Development Trends
In the development of automotive components before the 1970s, the key area of
technical development was, for the most part, mechanical structure components. The
structural design technology developed during this period became the key foundation
for the subsequent development of auto electronics. Afterwards, in line with the trend
toward the increased use of electronics in automobiles, automotive technology
continued to build on the foundation of traditional mechanical structures; with the
4
maturity of design techniques for the internal combustion engine, chassis, and body
frame, electrical technologies based on motors were developed to improve the heat
dissipation of internal combustion engines and enhance the (DC generator) electrical
generating equipment of the vehicle and the electrical engine starter.
With the rapid development of semiconductors in the 1980s, automotive technology
continued to introduce large-scale applications of diode, transistor, and silicon chip
technologies, leading to the dawning of the age of auto electronics. This stage also
saw the initial development of fuel injection controllers, electronic climate control,
and electrical controller technology for automotive receivers and stereo systems. With
the rapid development of electronic control technology, as well as semiconductor and
integrated circuit development, the microcontroller chips used in automotive
electronic control unit (ECU) of the time developed from 4-bits, to today’s 32-bit or
even 64-bit versions. Continuous upgrades of processing speed and controll
capabilities allowed attainment of highly intelligent auto electronic controllers.
However, large amounts of electronic product applications and the need for
information from the electronic controller units of each automotive system to flow via
individual cables, and for interfacing with other electronic controller units via
point-to-point interfaces, made vehicular wiring distribution important Iincreasingly
complex cabling added to the difficulty of inspection and maintenance , and resulted
in greater length and weight of wiring, which pushed up costs.
Accordingly, vehicle interior digital controller networking technology was developed
in the 1990s, such as CAN, LIN, FlexRay and MOST, with ring net concepts
being
applied to vehicle interior electronic control networks that allowed the electronic
controller units in the system to send and receive information via an LAN bus and
attaining multi-node communication capability. This also overcame the shortcomings
caused by traditional cabling. In addition, in the power generation and transmission
part of the vehicle, environmental power generation technologies, including hybrid
power generation, electrical power generation, hydrogen energy, and bio-material
5
generation have become the developmental norm and electronic technology has
gradually shifted from its supporting role of the past to become the core technology of
automotive development.
Chart 2. Developmental Timeline of Global Auto Electronics
Clean, efficient power source technology (hydrogen, hybrid, electrical)
Digital Network Control Technology (CAN, LIN, MOST, X by Wire)
Electronic control technology (power train control, climate control, chassis suspension control)
Technical development of electrical control components (transistors, diodes and embedded processors)
Electromechanical power technology (generators, starter motors, power cooling system and automotive lighting
Technological
Development
Basic automotive technology (power train, chassis, car frame)
~1970
High-efficiency engines
Power Train
Chassis
1980
Engine management systems
Manual speed shifter systems
Chassis mechanical frame
1990
2000~
Electronic fuel-injected engines
Electronic fuel-injected engines
Hydraulic assisted brake system
Electronic manual transmissions
Hydrogen propulsion
Automatic transmission systems
Hydraulic assisted steering systems
Traction control systems
X-by-wire
Hydraulic independent suspension systems Anti-lockup breaking systems (ABS) Dynamic stabilization systems
Car Body
Vehicle driving illumination system
Security
Safety
Electric window controls
Climate control systems
Car door centralized control system
Car alert systems
Supplemental safety airbags
Driver
Information
Mechanical display
Product
Development
LED lighting
FM radio
HID headlights
Keyless entry systems
Tire pressure monitoring system
Electrical display
Hybrid propulsion
Adaptive front lighting systems
Passive sensor entry system
Engine lock chip
Navigation systems
Car Infotainment systems
Car Stereo
LED headlights
Anti-collision warning system
Digital display
Car equipped IT systems
Head-up display
Digital broadcasting
6
Major automobile manufacturers the world over display their concept cars of the
future at major automotive exhibitions every year, and the ideas they roll out always
exceed what is imagined. An opinion survey of industry, government, and academic
specialists reveals a high degree of automotive society development in the 21st century.
The survey indicates that the future development of the automobile will center on
environment, energy, social system, and safety, and all of these areas require a
combination of electronic control technology, new materials, and biotechnology.
Chart 3. Future Trends for Intelligent Vehicles
Source: “21st Century High Degree Automotive Society” Cross-industry Data Survey
Association, Japan
3. Status of the Global Auto Electronics Market
As the ratio of auto electronics devices in each automobile increases each year, so
does market demand for auto electronics. According to statistics, the global market
size for electronic systems in automobiles (systems with electronic components,
including some mechanical parts) reached US$158.2 billion in 2008, for a gain of
6.3% over 2007. With the impact of the global financial crisis, the worldwide auto
electronics market is expected to contract 14.8% in 2009 but return to a scale of
7
US$176 billion by 2012, with a compound average annual growth of 2.7% between
2008 and 2012.
Table 1. Market Size of Global Auto Electronics Systems Applications by Sector
Unit: US$1 million
CAGR
2008
2009(e)
2010(f)
2011(f)
2012(f)
2008–2012
Power
Train
Chassis
53,175
45,199
47,459
51,255
60,481
3.3%
18,419
14,735
15,030
16,984
18,682
0.4%
Safety
24,540
22,086
22,528
24,330
26,763
2.2%
Security
3,426
2,741
3,152
3,467
4,161
5.0%
Car Body
Driver
Information
37,499
32,999
33,329
36,995
40,695
2.1%
21,165
20,107
20,509
22,560
25,267
4.5%
Total
Growth
Rate
158,224
137,867
142,006
155,591
176,049
2.7%
6.3%
-14.8%
2.9%
8.7%
11.6%
-
Source: Compiled for this report.
Categorized by the area in which auto electronics are installed, in 2008 the power
train market segment was the largest of the six areas, accounting for 33%, followed by
car body at 24% and safety at 16% (as indicated in Chart 3). The primary reason for
the power train area having the largest market segment is a response to vehicle
emissions standards and continuing rise in oil prices, which have stimulated R&D into
energy-conserving engines. Also, as auto manufacturers around the world continue to
devote more of their production lines to hybrid or diesel automobiles, the power
train’s 33% market share of total auto electronics in 2008 will continue climbing and
reach 35% by 2012.
8
Chart 4. Auto Electronics Market Share by Application Area
2008 Auto Electronics Market Share by Application Area
2008年各汽車電子應用領域比重
2012 Auto Electronics Market Share by Application Area
2012年各汽車電子應用領域比重
Driver駕駛資訊
Information
13%
13%
Driver Information
駕駛資訊
14%
14%
Power Train
動力傳動
33%
33%
Power Train
動力傳動
35%
35%
Car Body車身
24% 24%
Security保全
2% 2%
Car車身
Body
23%
23%
安全
Safety
16%
10%
底盤
Chassis
12% 12%
保全
Security
2%
2%
安全
Safety
15%15%
底盤
Chassis
11%11%
Source: Compiled for this report.
Among these six application areas, another market into which manufacturers are
pouring R&D effort is safety. In addition to the safety needs of human beings, the
principal reason for this effort lies in the R&D advances made by automobile system
manufacturers in active auto safety technologies such as advanced supplemental
safety airbags, pedestrian protection systems, blind-spot warning systems, car lane
departure warning, and night vision systems. However, advanced safety equipment is
often first adopted in high-end vehicle models; it is optional in mid-range models, and
awaits utilization in high-end models and a fall in costs before it evolves into a
standard feature.
Taiwan currently has many IT/telecomm electronic manufacturers working to position
themselves in the driver information system market, which is projected to grow from
US$21.17 billion in 2008 to US$25.27 billion in 2012 for a compound average annual
growth rate of 4.5%.
II.
Status of Taiwan’s Auto Electronics Industry
9
Although the domestic demand market for automobiles in Taiwan is small and its
electronics industry lacks global Tier 1 manufacturers, the R&D capacity amassed by
it’s the island’s electronics industries, its complete industry chain, and the flexibility
and capacity demonstrated by its Tier 2 or component manufacturers make those
industries ideal suppliers and collaborative partners for global Tier 1 manufacturers.
And as the automobile market on the Chinese mainland comes into its own, Taiwan
manufacturers can exploit the advantages of geographic proximity and cultural and
ethnic affinity to actively position themselves in the Chinese electronics market with
great effectiveness, providing an important niche for Taiwan’s auto electronics
industry.
2.1 Supply and Demand in the Auto Electronics Industry
Auto electronics appear in a wide range of automotive applications, with nearly 100
categories of system products from power train, chassis, and car body to driver
information and multimedia entertainment. With the capabilities amassed by Taiwan’s
IT/telecom industry, together with the R&D conducted by Taiwan’s automotive
industry on its own initiative and it industrial system, an important industrial
development strategy is to screen the core competitiveness and R&D capabilities of
domestic manufacturers and select products that have development potential and are
suitable for Taiwan.
Since Taiwan’s whole-car technology is closely tied in with the foreign technology of
the parent manufacturers, and the development of Taiwan’s auto parts industry is
primarily based on that are not directly related to safety, products most areas in which
Taiwan auto electronics firms are pouring their resources begin with car body
electronics, driver information, and security products, then gradually extend to
electronic products pertaining to core automotive engine/power train and
suspension/chassis control systems.
Taiwan’s auto electronics products that currently have development potential include
supplemental air bags and tire pressure sensors in the safety area; car alert systems,
10
keyless entry systems, passive sensor entry systems, and engine lock chips in the
security area; car illumination systems (including HID headlights, adaptive front
lighting, and LED lighting) in the car body area; and navigation systems and car
infotainment systems in the driver information area. A depiction of product
distribution throughout the vehicle is provided in Chart 5.
Chart 5. Taiwan’s Auto Electronics Products with Development Potential
Source: Compiled for this report.
2.2 Gaps in Industry Supply Chain, Investment Niches, and Prospective
Foreign Investors
Taiwan currently has auto electronics manufacturers active in each of the six major
areas of the auto electronics industry.
In the safety area, the Mei-An Autoliv Co., a subsidiary of the Swedish safety air bag
maker Autoliv, is developing supplemental safety air bag products. Domestic
manufacturers developing tire pressure sensor systems and vehicle backup radar
products are primarily selling in the after-sales market. Taiwan’s strong, CMOS and
CCD lens electronic technology provides plenty of room for developing vehicle
backup radar.
11
In the security area, DunYoung Co., Whetron Electronics Co., and Tung Thih
Electronic Co.,., which has long engaged in technological cooperation with Japan’s
Mitsui, have a solid share of the car alert system, keyless entry system, and passive
sensor entry system markets and have become Tier 1 suppliers to the original parts
market.
In the car body area, products developed in Taiwan at present include car window
controls, climate controls, x-by-wire components, and auto illumination systems. For
example, Tung Thih Electronic Co. and Whetron Electronics Co. have become Tier 1
suppliers of car window controller components, and the Japanese-owned Ta Yih
Industrial Co. has become a Tier 1 car illumination product supplier. Elitech
Technology Co. provides the Ta Yih Industrial Co. with modular components,
becoming a Tier 2 supplier. Taiwan Calsonic, Taiwan General Exporters, and Japanese
subsidiaries Denso Taiwan and Matsushita Taiwan are Tier 1 manufacturers of climate
control systems. Manufacturers developing x-by-wire products include the Antec
Electric System Co., Rica Auto Parts Co., and Taiwan Yazaki Corp.
In the driver information area, manufacturers developing car infotainment products,
such as Clarion and Taiwan Matsushita, remain subsidiaries of parent Japanese
companies which control their technology. However, the Universal Scientific
Industrial Co., E-Lead Electronic, BenQ, and Hamg Shing Technology Corp. serve as
Tier 1 suppliers of mobile information systems, while Chao Long Motor Parts Co. and
Lien Cheng Co. have become Tier 1 suppliers of dashboard parts used by auto
manufacturers in their products.
Taiwan used to lack its own technology for core automobile systems. Few electronic
control systems for the propulsion, engine, power train, suspension, and safety areas
have been developed, but Taiwan has many OEM manufacturers of Tier 1 system
modules and has amassed a certain technological prowess. In addition, Taiwan’s
capabilityies in propulsion motor technology are quite complete. Thus, bringing in
Tier 1 manufacturers with integrated core system technology such as Denso, Visteon,
Delphi, and Johnson Controls, to work with Taiwan’s complete mechanical, electrical,
12
and electronic industry chain, in combination with the enormous demand for
automobiles on the Chinese mainland, would create new market opportunities.
The innovation, R&D, and manufacturing prowess of Taiwan’s IT/telecom industry is
unparalleled. Foreign firms could use various methods to cooperate with Taiwan’s
IT/telecom manufacturers in the field of car navigation and infotainment, to upgrade
the value-added of such systems and create cost advantages for a win-win solution.
2.3 Major Suppliers in Taiwan
Table 2. Current Status of Taiwan Auto Electronics Suppliers by Sector
Auto Electronics Sector
Auto Electronics Product
Manufacturers Involved
Engine compartment
management
Universal Scientific
Industrial Co.; Shihlin
Electric Co.
Starter motor, generator
Shihlin Electric Co.
Cruise control
DunYoung Co.
Propulsion/Power Train
Chassis
Anti-locking brake systems Bosch Taiwan
Supplemental air bag
Universal Scientific
Industrial Co.; Mei-An
Autoliv Co.
Tire pressure sensor
systems
Universal Scientific
Industrial Co.; Mobiletron
Electronics Co.
Safety belts
Mei-An Autoliv Co.
Car backup radar
Tung Thih Electronic;
Safety
Antec Electric System Co.
Car backup system CMOS DunYoung Co.
Car backup system CCD
Hamg Shing Technology
Corp.; E-Lead Electronic,;
Whetron Electronics Co.
Car anti-theft alarm
Tung Thih Electronic;
Whetron Electronics Co.;
DunYoung Co.
13
Keyless entry systems
Whetron Electronics Co.
Door control
Tungthih Electronic;
Whetron Electronics Co.
Windshield wiper control
Whetron Electronics Co.;
Denso Taiwan; Shihlin
Electric Co.
Car illumination systems
Ta Yih Industrial Co.; Depo;
China Fastener Co.
Electric window control
DunYoung Co.; Taigene
Electric Machinery Co.,
Ltd.
LED tail lights
DunYoung Co.; Universal
Scientific Industrial Co.;
Everlight Electronic Co.;
LiteOn Technology Corp.
Car Body
Driver Information
Climate control systems
Taiwan Calsonic; Taiwan
General Exporters.; Taigene
Electric Machinery Co.;
Taiwan Denso; Taiwan
Matsushita
Electric seat adjusters
Taigene Electric Machinery
Co.; Antec Electric System
Co.
Automotive x-by-wire
Antec Electric System Co.;
TaiYue Electric Co..;
Taiwan Yazaki Corp.
Car infotainment systems
Clarion Taiwan; Matsushita
Taiwan; PROTON; E-Lead
Electronic; Clientron Corp.
Onboard IT system
Universal Scientific
Industrial Co.; E-Lead
Electronic; BenQ; Hamg
Shing Technology Corp.;
Mobiletron
Automobile picture screens Clarion Taiwan; Matsushita
Taiwan; PROTON; Antec
Electric System Co..;
Universal Scientific
14
Industrial Co.; Hamg Shing
Technology Corp.
Car navigation systems
Universal Scientific
Industrial Co.; E-Lead
Electronic; BenQ; Hamg
Shing Technology Corp.;
MITAC; Garmin Corp.
Digital television
Antec Electric System Co.;
Mobiletron; E-Lead
Electronic
Dash board panels
Chao Long Motor Parts
Co.; Lien Cheng Co.
Rear-view mirror picture
screen
Fitness Factory;
Mobiletron; Tung Thih
Electronic
LCD panel
AUO; Chimei; InnoLux;
TPO Displays Corp.
Source: Compiled for this report.
15
III. Investment Opportunities for Foreign Investors
The automotive industry is the locomotive of a country. The scope of its related
industries is closely tied to electronics, mechanics, steel, plastics, and glass. A
hundred satellite plants support a car plant producing finished vehicles. An employee
at a plant producing finished vehicles can create over three other job opportunities,
and thus auto manufacturing becomes a key industry to be protected in each country.
At the outset of Taiwan’s auto industry development,, Japanese parent plants
controlled the technology. With no technology of its own as backup, and with the
effects of a lack of favorable factors, development was constrained. But government
support in the form of a first- and second-stage automotive industry development
strategy boosted the rate of domestic production and brought automotive component
development and manufacturing capabilities. Taiwan automotive component
manufacturers not only possess manufacturing capability, but also are capable of
creating new designs for components.
Looking at the overall structure of Taiwan’s automotive component industry, there are
2,343 plants connected with the manufacture of auto parts in Taiwan and
approximately 85,000 people employed in the industry. Over 90% of these parts
makers are small and medium-sized enterprises (SMEs). Despite most manufacturers
in the industry being SMEs, their parts have gradually gained a dominant share of the
overseas sales and service market. The revenue generated by each worker in the
automotive parts industry has steadily risen over the years, breaking through the
NT$4.86 million mark in 2007.
Viewed in terms of technological capability indicators, the amount of money spent
purchasing technology gradually declined, from NT$5.51 billion in 2003 to NT$4.07
billion in 2007, while, the amount of technology sales rose from NT$340 million in
2003 to NT$580 million over the same period. This reflects a gradual rise in the
in-house technological capabilities of Taiwan manufacturers.
16
Table. 3 Revenue Performance and R&D Expenditures of Taiwan’s Automotive
Parts Manufacturers
2003
2005
2007
Number of Manufacturers
2,033
2,322
2,343
Employees (1000)
76
88
85
Operating Revenue (NT$ million)
4,037
5.080
4,119
Technology Purchases (NT$ million)
55.1
46.9
40.7
Technology Sales (NT$ million)
3.4
4.3
5.8
Source: Industry Statistics Survey (May 2009), Ministry of Economic Affairs
In terms of size, with the exception of University Scientific Instruments Co., E-Lead
Electronics, Mobiletron, Ta Yih Industrial Co., and China Fastener, which are large
over-the-counter traded companies with 500 or more employees each, Taiwan’s auto
electronics manufacturers are mostly SMEs.
When Taiwan auto electronics manufacturers that have begun to engage in R&D on
advanced automobile control and safety products are compared with major
international manufacturers, they still lag behind in of number of employees and
revenue generated.
Given the limited size of the domestic market, cooperation with
large international manufacturers is the best strategy for Taiwan’s auto electronics
manufacturers.
With Taiwan’s accession to the WTO and the trend toward globalization, the
development of the island’s automobile industry has entered a period of intense
competition. Gaining core advantages and global competitiveness has become a major
developmental strategy for manufacturers. Especially given the impact on the industry
of the shift to auto electronics and intelligent vehicular systems, Taiwan’s
manufacturers need to overcome an enormous gap. One after another, domestic
manufacturers such as Universal Scientific Industrial Co., Mei-An Autoliv Co.,
DunYoung Co., Whetron Electronics Co., Mobiletron, and Tung Thih Electronic Co.
are engaging in R&D on advanced auto electronics technology. In addition, in line
with the R&D direction taken by Taiwan’s manufacturers domestically, domestic
automotive research institutions are also actively engaged in forward-looking
technological R&D or are collaborating with manufacturers to develop new products.
17
For instance, the Chung-Shan Institute of Science and Technology, in addition to
cooperating with Tsuang Hine Steering Wheel Co., Ltd. to develop air bags and safety
belts, is currently actively engaged in R&D pertaining to airbag ECUs, tire pressure
sensors, night vision systems, anti-collision radar systems, and the like. The Industrial
Technology Research Institute’s Mechanical and Systems Research Laboratories are
working with the China Motor Corp. to develop a vehicle-mounted lane departure
warning system.
Summary
The auto electronics industry has been developing over more than three decades; but
with the conceptual derivations of active safety, energy conservation, and
environmental friendliness, as well as advanced intelligent control, innovative
technology products in many categories continue to emerge. With the exception of
navigation systems, rear seat entertainment systems, tire pressure sensor systems, and
advanced safety airbag and parking assistance systems, most car body electronics and
driver information systems are still in the initial phase of their life cycles, with
pertinent R&D and products continually being announced and introduced. The
technological development of tire pressure sensors and head-up displays in Taiwan
has already entered the mass-technological improvement, with some manufacturers
entering the production phase, leaving a relatively small technological gap between
them and large international manufacturers. In line with the driving force of demand
in the international market, if the reduction on production costs can be accelerated, as
global purchasing of automotive components speeds up, Taiwan will be presented
with outstanding opportunities in the international market.
In the areas of navigation and entertainment systems, where Taiwan has extremely
strong advantages, in addition to the original equipment market it has a certain share
of the after-sales market as well, with a 46% share of the European entertainment and
navigation system aftermarket, amounting to nearly €1.7 billion. Taiwan currently
continues to upgrade its ability to negotiate pricing with international automakers and,
in case after case, is gaining a foothold in the original equipment markets of newly
18
emerging countries, with great opportunities for future market growth. In addition,
domestic manufacturers possess the competitive strengths of assured product quality
and flexible manufacturing. Utilizing core technology and achieving the ultimate goal
of securing footholds in the markets of advanced areas such as the EU, US, and Japan
will bring new benefits of increased revenues and upgraded technology.
Given the R&D structure of Taiwan’s auto electronics products and developmental
trends in global auto electronics, if Taiwan auto component makers can utilize their
current product development capability together with new technological applications,
they will have considerable competitiveness in the car body electronics and driver
information sectors. However, it must be noted that large amounts of R&D funds are
required to develop auto electronics products, and Taiwan’s automotive component
manufacturers are mostly SMEs. With limited technological and capital resources, a
major challenge in the future will be for them to rapidly develop competitive products
through international cooperation.
IV.
Investment Incentives
To promote the rapid development of Taiwan’s industries, the government provides
many kinds of preferential measures including tax incentives, R&D subsidies, and
low-interest loans to assist members of the industry and attract and encourage foreign
investment in Taiwan.
Table 4. Incentive Measures to Encourage Investment in Taiwan
Incentive
Incentive Measure
Leasing Tax Incentives  Incentives for Newly
Emerging Strategic
Industries (Choice of one
of two options:
shareholder investment
19
Contact Information
Industrial Development
Bureau, Ministry of
Economic Affairs
http://www.moeaidb.gov.tw
E-mail:
deduction or five-year
income-tax holiday
 Manpower training
expense incentive (35%
of spending deducted
from taxable income for
the year)
 R&D expense incentive
(35 percent of spending
deducted from taxable
income for the year)
 Accelerated equipment
depreciation (two-year
depreciation)
 Deductions for equipment
purchases and technology
investments
 Duty-free import of
equipment
 Income tax exemption for
technology transfer or
technological cooperation
20
service@moeaidb.gov.tw
Tel: (+886-2) 2754-1255
Incentive
R&D subsidies
Incentive Measure
 Industrial Technology
Development Program
(ITDP)
 Small Business
Innovation Research
Program (SBIR)
Contact Information
Department of Industrial
Technology
http://doit.moea.gov.tw
Tel: (+886-2) 2321-2200
 Industrial Technology
Development Alliance
Program (ITDAP)
 Strategic Service Oriented
Research & Development
Program (SRD)
 Information Technology
Applications Promotion
Project (ITAP)
 Industrial Technology
Innovation Center
Program (MNCD)
 Multinational Innovative
R&D Centers in Taiwan
Program (MNCF)
 New Leading Product
Development Project
 Business R&D Alliance
Promotion Project
 Business Operating
Headquarters Services
Contact:
solution@moeasmea.gov.tw
21
Industrial Development
Bureau, Ministry of
Economic Affairs
http://www.moeaidb.gov.tw
E-mail:
service@moeaidb.gov.tw
Tel: (+886-2) 2754-1255
Incentive
Low Interest Loans
Incentive Measure
Industry Research and
Development Loan Program
Executive Yuan
Medium-term Low Interest
Loans
Special Project Loans to
Bolster SMEs
Executive Yuan National
Development Fund Loan
Incentives
Hsinchu Science Park
Low-interest Loans
Manpower Training
International Talent
Recruitment
National Defense Reserve
Officer Training
R&D Substitute Service to
fulfill Military Service
Obligation
Source: Compiled for this report
22
Contact Information
Industrial Development
Bureau, Ministry of
Economic Affairs
http://www.moeaidb.gov.tw
E-mail:
service@moeaidb.gov.tw
Tel: (+886-2) 2754-1255
Council for Economic
Planning and Development
http://www.cepd.gov.tw
Tel: (+886-2) 2316-5300
Small and Medium
Enterprise Administration,
Ministry of Economic Affairs
http://www.moeasmea.gov.tw
E-mail:
solution@moeasmea.gov.tw
Tel: (+886-2) 2368-6858
National Development Fund,
Executive Yuan
http://www.df.gov.tw
E-mail: df@df.gov.tw
Tel: (+886-2) 2389-0633
Hsinchu Science Park
Administration Bureau
http://www.sipa.gov.tw
Tel: (+886-3) 577-3311
Department of Investment
Services, Ministry of
Economic Affairs
http://hirecruit.nat.gov.tw
E-mail:
hirecruit@taitra.org.tw
Tel: (+886-2) 2370-9687
National Defense Reserve
Training Office
http://rondi.mnd.gov.tw
E-mail: mndsys@iii.org.tw
Tel: (+886-2) 2736-8088 Ex.
3414
R&D Substitute Service
Office, Ministry of the
Interior
http://rdss.nca.gov.tw
E-mail:
rdss@mail.nca.gov.tw
Tel: (+886-2) 2736-6066 Ex.
206
V.
Industry-Academia Collaboration in Taiwan
Table 5
Web
Industrial Development Bureau, MOEA
www.moeaidb.gov.tw
Department of Industrial Technology, MOEA
www.doit.moea.gov.tw
Department of Investment Services, MOEA
www.dois.moea.gov.tw
Institute of Transportation, MOTC
www.iot.gov.tw
Taiwan External Trade Development Council
www.taiwantrade.com.tw
(TAITRA)
Taiwan Electrical and Electronic
www.teema.org.tw
Manufacturers’ Associaton (TEEMA)
Industrial Technology Research Institute
www.itri.org.tw
(ITRI)
Automotive Research & Testing Center
www.artc.org.tw
(ARTC)
Institute for Information Industry (III)
www.iii.org.tw
Metal Industries Research & Development
www.mirdc.org.tw
Centre (MIRDC)
Chung-Shan Institute of Science &
cs.mnd.gov.tw
Technology
Automobile Electronics Consortium
www.teema.org.tw
Taipei CarTronics Promotion Office
www.tca.org.tw
(TCPO)
23