Taiwan dangles US$335 million to woo foreign chip makers

The seven-year plan aims to subsidise the research and development costs incurred by global chip companies that build centres on the island
The programme would also apply to local chip firms that convince foreign suppliers to establish such operations in Taiwan

Semiconductors

Bloomberg

Published: 8:28pm, 3 Jun, 2020

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Taiwan’s cabinet plans to allocate more than NT$10 billion (US$335 million) to entice foreign chip makers to set up research and development facilities locally, people familiar with the plan said, escalating global competition for much-sought-after semiconductor technology.

The seven-year blueprint to be unveiled on Thursday aims to subsidise as much as half of all the research and development costs incurred by global chip companies that build centres on the island, said the people who asked not to be identified because the plan is not public yet.

The programme would also apply to local chip firms that convince foreign suppliers to establish such operations in Taiwan. The government is hoping to secure new investments from at least one company each year, according to the people, who added that certain requirements such as on the amount invested and the number of jobs created would apply.

The new policy emerges at a time Taiwan has been caught in the middle of a clash between the US and China over the development of chip technology that powers everything from smartphones to 5G base stations.

Taiwan became top chip manufacturer with US help. Can it stay there?

Last month, the Trump administration barred any chip maker using American equipment from supplying China’s Huawei Technologies without approval, dealing a major blow to Taiwan Semiconductor Manufacturing Co and the island’s other chip makers.

The planned new incentives are designed to attract capital and talent to maintain the island’s industry lead, the people said.

Taiwan cabinet spokesman Ting Yi-ming confirmed the government has made plans to attract investments and create jobs, but said details need to be finalised.

Taiwan President Tsai Ing-wen has pledged to transform Taiwan into a research and development hub for emerging technologies. Her government is now pursuing more foreign tech investments from multinational companies seeking to shift out of China over concerns about Beijing’s intensifying trade war with Washington and their desire to reduce dependency on the world’s second largest economy.

US plans to further restrict Huawei’s development of semiconductors using American technology

The incentive programme is mainly targeted at makers of memory chips, the people said, though part of it will also be used to attract global 5G and artificial intelligence technology companies, they added. Another target are power semiconductor companies, one person said. Such makers often focus on non-silicon material, at a time when chip companies are keenly researching new options beyond silicon.

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