Written by Sin Lee and Chan-Yuan Wong. This article argues that Taiwan’s AI and net-zero transitions risk creating a K-shaped economy, as large firms gain better access to capital, technology, talent, and renewable energy while SMEs struggle with upgrading costs. It examines how unequal access to green electricity could constrain SMEs’ participation in global supply chains and proposes policy support.
Written by Drake Long. This article explores the opportunities and challenges facing Taiwan’s dual-use defence industry. Although Taiwan’s industry is ambitious to become a manufacturing hub for drones and other dual-use technologies, its success depends on sustained government investment and access to foreign markets, with the EU as an ideal target for deepening ties.
Written by Thung-Hong Lin and Chun-Yin Lee. This article discusses the impact of China’s tightening control and U.S.–China trade tensions on Taiwanese firms. The authors find that traditional electronics firms have suffered revenue and profit declines, while high-end semiconductor companies have shown counter-cyclical growth. Ongoing tariff negotiations leave future prospects uncertain.
Min-Hua Chiang examines the growth of Taiwan’s robust ICT industry. China was considered a potentially important competitor to Taiwan’s ICT firms a few years ago. However, China’s effort to reduce its reliance on importing key components was unsuccessful. In July 2021, Tsinghua Unigroup, a state-backed semiconductor manufacturer, filed a bankruptcy request. Chinese chip industry only took 7.6% of total global semiconductor sales. Its equipment and materials for production are still limited to older technologies. The American government has been encouraging manufacturing production at home to reduce imports of key components from overseas. Nevertheless, the high labour cost and lack of qualified workers in the semiconductor industry will make it difficult to reduce its reliance on Taiwan. The greater US-China competition in the high technology industry is only likely to increase the superpowers’ dependence on Taiwan’s semiconductor industry.
Written by Jason Wang. While Taiwan’s democratic IP-friendly government, hardware, and engineering talents give the nation a competitive advantage in the global New Space industry, complex challenges still lie ahead. Specifically, how effectively can the Tsai Administration rally a whole-of-government approach to reduce the friction of building a domestic ecosystem that encourages international new space players to stay and grow with Taiwan? Six strategic focus areas will be discussed in the following paragraphs: Infrastructure for new space industry development, Risk-tolerant funding, a.k.a the Taiwan Space Fund, Spectrum and orbital slots, Space situational awareness, Software applications not well as hardware, an education system redesigned to produce multidisciplinary talent and more women.
Written by John F. Copper. The recent economic news emanating from Taiwan is the impressive growth in its gross domestic product (GDP)—one of the basic indicators of economic vitality. This is certainly good to hear. After experiencing negative growth throughout most of 2020, conditions changed in the last quarter of the year. As a result, Taiwan even bested China’s GDP growth. Furthermore, the upward trend accelerated this year, with GDP expansion the highest in two decades. If this growth is sustained, 2021 will end with a welcomed 5 per cent or better rise.
