Cabinet passes plan to develop central Taiwan smart manufacturing hub

Taipei, June 26 (CNA) Premier Cho Jung-tai (卓榮泰) instructed the Ministry of Economic Affairs on Thursday to work closely with local governments based on a draft plan to transform central Taiwan into a smart manufacturing hub under the government's plan to level up regions around the country.

Cho issued the instruction during a weekly Cabinet meeting, after a draft plan aimed at turning central Taiwan into a global hub of smart manufacturing with existing industries and new businesses was presented and approved, the Cabinet said in a statement.

The draft plan for central Taiwan covers Taichung and the counties of Nantou, Changhua and Yunlin, one of the six regions across the country where President Lai Ching-te (賴清德) is seeking to ensure balanced development, as outlined in his National Day speech last October.

According to the draft plan, the machinery and precision manufacturing industries in Taichung will be transformed through the introduction of artificial intelligence (AI) to improve production efficiency and integration of the supply chain.

AI is expected to also help the metal manufacturing business in Changhua to reduce production costs, improve energy efficiency and make operations more environmentally friendly.

The ministry also plans to develop auto parts manufacturing in Changhua.

Semiconductors and drones are two industries the ministry plans to build as new sectors driving growth in central Taiwan, it said in a separate statement.

American chipmaker Micron already has a production base in Taichung, while Taiwan Semiconductor Manufacturing Co. is set to begin construction of a new facility in the city later this year.

Taichung-based Aerospace Industrial Development Corp., a manufacturer of military and civil aviation products, is positioned to lead the creation of a supply chain for drone manufacturing with products and components involving no Chinese parts, the ministry said.

The ministry owns a 35-percent stake in the Taiwan Stock Exchange-listed company, which was formerly a research and development unit of the Air Force.

In Nantou and Yunlin, technologies will be introduced to improve efficiency in production and distribution of their respective agricultural and aquacultural products, allowing better returns for local producers with small-scale operations, the ministry said.

The ministry will next discuss with the city and county governments details of the plan to better meet the needs of local businesses, it said.

Deputy Minister of Economic Affairs Ho Chin-tsang (何晉滄) said during a press conference after the Cabinet meeting that the ministry is studying amending laws on mergers, after local businesses expressed concern over the government's proposal encouraging them to set up holding companies.

The plan for central Taiwan will also need to be signed off on by the premier, including a finalized timeline for the implementation and budget.

As of May 18, the Cabinet had approved similar plans for the Taoyuan-Hsinchu-Miaoli region, the Chiayi-Tainan-Kaohsiung-Pingtung region, the outlying islands of Kinmen, Penghu and Matsu, and eastern Taiwan.