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MOEA's incentive packages attract over NT$2.1 trillion in investments

12/30/2023 08:32 PM
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Taipei, Dec. 30 (CNA) Three incentive packages offered by the Ministry of Economic Affairs (MOEA), which were launched in 2019, have attracted local companies to pledge more than NT$2.1 trillion (US$68.33 billion) in investments in Taiwan, statistics released by the MOEA showed on Saturday.

In a statement, the MOEA said the three incentive packages, which offer preferential loans to encourage investments in Taiwan, has prompted more than 1,400 local companies to agree to pour funds into Taiwan since 2019, which is expected to create 149,000 jobs in the local market.

With Taiwan Semiconductor Manufacturing Co. (TSMC), the world's largest contract chipmaker, keen to expand production and upgrade technologies in Taiwan, the MOEA said that 22 of its suppliers such as IC packaging and testing service provider ASE Technology Holding Co. and silicon wafer maker Wafer Works Corp., have promised to invest NT$66 billion in Taiwan under the three incentive packages, the MOEA said.

Amid escalating trade tensions between the United States and China, the MOEA launched the first package of incentives on Jan. 1, 2019, which involved the Cabinet's National Development Fund assigning NT$210 billion in preferential loans to persuade Taiwanese investors with operations in China to return to Taiwan.

The incentives are aimed at reducing Taiwan's reliance on the China market and at mitigating the impact resulting from the Washington-Beijing trade frictions.

In addition, another incentive package was launched on July 1, 2019 by the National Development Fund to assign NT$100 billion in preferential loans to help local small and medium sized enterprises invest in Taiwan.

The third package consists of a fund to assign NT$120 billion since July 1, 2019 to encourage enterprises which are not covered by the first and second packages to invest in innovation industries.

The three incentive packages, which have been extended for an additional three years, focus on the 5 plus 2 industries initiated by the government, which are smart machinery, Asia Silicon Valley, green technologies, biotech, national defense, new agriculture and circular economy.

CNA file photo
CNA file photo

The MOEA said the more than NT$1.2 trillion investments pledged by these enterprises have been leading to an upgrade in local industries, which helped the local economy fend off not only the impact from the trade tensions between the U.S. and China but also the effects from interruptions in the global supply chain caused by the COVID-19 pandemic.

The MOEA added a large number of investment projects under the three packages, which involved artificial intelligence development and electric vehicle related industries.

These are expected to help Taiwan seize business opportunities in these emerging sectors on the global market.

The MOEA said Taiwan has commanded the lead over many other countries in the information technology industry so many Taiwanese companies have become part of the global supply chain of U.S. electric vehicle brand Tesla.

According to a recent report by the Common Wealth magazine in Taiwan, a total of 29 Taiwanese key component firms have served as Tesla suppliers in a wide range of products, such as power systems, electric motors, batteries, car frames and charging systems.

Among the companies echoing the government's call to invest in Taiwan under the three packages to invest in the EV market included flat panel supplier Innolux Corp., contract electronics maker Pegatron Corp., thick film substrate producer Tong Hsing Electronic Industries, Ltd. and forged wheel supplier SuperAlloy Industrial Co., which have been part of Tesla's supply chain, according to the MOEA.

It said some old economy companies have also entered the EV market as they have set sights on new energy development by applying for the ministry's incentive programs.

One of them is petrochemical conglomerate Formosa Plastics Group, which is investing in lithium-titanate battery development, and motorbike brand Kymco, which has started to roll out electric scooters. The three packages are scheduled to expire at the end of 2024.

(By Pan Tzu-yu and Frances Huang)

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