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IT SECTOR:
Taiwan: The Technology Giant
Taiwan's exports to the Middle East countries continue to rise backed by the island's technological sophistication...
Over the last 20 years, Taiwan's information technology (IT) industry has played a crucial role in the worldwide IT market. Taiwan has been the world's largest supplier of notebook computers, motherboards and liquid-crystal-display (LCD) monitors over the years. This trend is likely to remain unchanged in the near future. In 2005 alone, Taiwanese IT manufacturers shipped a over US$70 billion worth of hardware globally. Nine major IT hardware products - notebooks,  desktop PCs, motherboards, servers, digital cameras, optical disk drives, colour display tube (CDT) monitors, LCD monitors, and projectors accounted for most of the island's total IT hardware shipment value. Except for CDT monitors, nearly all products have been registering positive growth in value and volume. Projectors attained the highest growth followed by LCD monitors and digital cameras. North America and Europe remain the industry's most important export destinations, accounting for nearly 60 per cent of total shipments.
On the other hand, Taiwan's software market amounted to approximately US$4.6 billion in 2005. Taiwan's software market can be divided into three main segments: software products, corporate projects, and Web services. The software products market is estimated to be worth US$1.9 billion, the corporate projects market roughly US$1.3 billion, and the Web services market US$1.3 billion. Broadband Internet access, on-line shopping and entertainment were the main growth drivers in the Web services market. The government's e-Taiwan project and the merger of financial institutions into financial holding companies were the factors in the expanding corporate market.
TECHNOLOGY LEADER
The year 2004 was a banner year for Taiwan's semiconductor industry, as its production value reached US$32.4 billion, a 31 per cent increase on the previous year. With major expansion plans underway by leading semiconductor and TFT-LCD panel manufacturers, Taiwan is expected to retain the world's No.1 position in the TFT-LCD panel, IC foundry and IC packaging and testing industries.
Indeed, Taiwan has truly emerged as a global leader in the semiconductor and microelectronics industry. It is the home of the world's top IC foundries, Taiwan Semiconductor Manufacturing Corporation (TSMC) and United Microelectronics (UMC), which hold a majority of the market share.
Taiwan is also an important player in Mask ROM production, IC packaging  and IC testing, accounting for 57.1 per cent, 32 per cent and 36 per cent of global market shares respectively. Taiwan-based Advanced Semiconductor Engineering Inc (ASE) and Siliconware Precision Industries (SPIL) lead the IC packaging industry, while ASE Test and ChipMOS Technologies lead the IC testing industry.
Taiwan's IC design industry is ranked second only to the United States, accounting for 28.4 per cent of the world market. Taiwan also ranks as the world's third largest maker of DRAM components, supplying 17.1 per cent of the world market.
GLOBAL REACH
Through the constant development of new technologies and materials, Taiwan plans to stay ahead in the competitive market by encouraging innovation and nurturing its hi-tech industrial base. The government has designed a set of goals for the development its major industries.
Part of those measures include promoting investment by revising laws and regulations, improving public infrastructure, namely water, electricity, and telecommunications, and further developing industrial zones and providing basic facilities for industrial development.
Taiwan is also aiming to become a regional R&D centre for multinational corporations. The government  is focused on improving the island's technological infrastructure and human resources, establishing more research and testing facilities. Projects already in progress include research in key industries such as biotechnology, nanotechnology, genome research, software design and wireless communications.
The government's 'Two Trillion, Twin Stars' program aims to raise the value of production in the semiconductor and image display industries to US$28.5 billion each, and to transform its budding digital content and biotechnology sectors into "star" industries by the end of 2006.
By offering financial incentives to businesses that invest in global brands and establish international distribution channels the government aims to secure Taiwan's place among high value-added producers in the global supply chain.
To meet the new challenges of the future, Taiwan established export processing zones in the 1970's and science based parks in the 1980's. Entering the 21st century, the era of the knowledge-based economy, the island has built a pollution-free, high added value zone - the Nankang Software Park to stimulate the development and creativity of software products and services, elevate the R&D and quality control of software and establish a strong image of Taiwan's software industry. The Park is home to many knowledge-based industries such as biotech, SOC (system on a chip), digital content and industrial design.
In order to guarantee the efficient use and high availability of power, the park is equipped with a 69KV double looped high-voltage electricity power system. If an external power failure occurs,  the CPS continuous power system instantaneously provides backup electricity supply. The telecommunications of the park is equipped with fibre optics with ATM (Asynchronous Transfer Mode); the overall transmission rate can reach as high as 622 MB per second.
Nankang Software Park aims to create a world-class environment for software R&D and knowledge-based industry. Based on the concept of resource sharing and recognising the potential of Nankang Software Park to be a major venue in incubating the aspiring and upcoming high-tech entrepreneurs, the government encourages qualified professionals to provide consulting, training and implementation services.
Taiwan is expected to replace Japan as the world's largest liquid crystal display (LCD) TV production nation this year, as local makers in the line have been actively boosting their production capacities.
Several major LCD TV makers in Taiwan have mapped out ambitious annual output goals. Quanta Computer Inc., for instance, has set its goal at 900,000 to one million units and aims for the island's No.1 position in the line after signing a cooperation agreement with Sanyo of Japan to set up a new LCD TV venture.
Kolin Co., projects to ship about 600,000 LCD TVs this year, making it the largest LCD TV maker among local home-appliance manufacturers.
Proton Electronic expects the global LCD TV demand to rise to 40 million to 42 million units this year, or even 44 million. Industry experts predicted that Taiwanese makers will deliver a total of about 10 million LCD TVs this year (including facilities overseas), thus making Taiwan the worldÕs No. 1 LCD TV supplier.
As the world's largest notebook PC maker, Quanta Computer expected the LCD TV manufacturing to become its third major profit earner, trailing notebook PCs and cell phones. Quanta has received contract LCD TV orders from MNCs like Philips, and Toshiba.  AmTRAM Technology Co. Ltd. claimed that its annual LCD TV shipment is expected to reach about 800,000 units, sharply up 70 per cent from 480,000 units last year. Shipment of 32-inch models is expected to account for about 40 per cent (compared with about 20 per cent last year). AmTRAM is a major supplier of unde-20-inch (including) LCD TVs to many major Japanese brands such as Sony and Sharp.
BenQ shipped about 300,000 LCD TVs last year, and aims to boost the volume to 720,000 this year, with own-brand and OEM production accounting for 30 and 70 per cent respectively. BenQ's major OEM customers include Sanyo, Sony, and Thomson.
The shipment volumes of most other LCD TV makers in Taiwan are also expected to grow sharply this year, including Tatung Co., Ya Hsin Industrial Co., Ltd., Compal Electronics Inc., Lite-On Technology Corp., Hanspree, First International Computer Inc., Jean Co., Ltd., and Sampo Technology Corp., etc. Tatung projects to ship about 600,000 LCD TVs this year, compared with last year's 350,000 units.
Kolin said that it targets to export about 500,000 units under the Olevia brand, a brand the firm jointly developed Syntax-Brillian of the U.S. and ship about 100,000 units in Taiwan, mainland China, Hong Kong, and Brazil.
Teco, a major home-appliance brand in Taiwan, said that its own-brand LCD TV shipment is expected to top 200,000 units this year to major markets such as the US, Europe, Japan and mainland China. The company is scheduled to set up a production line in Eastern Europe in the second half this year to meet the rising demand in Europe.
THE CENTRE FOR BIOTECHNOLOGY
Biotechnology is poised to be Taiwan's next high-tech success story as the island prepares to develop revolutionary products
Taiwan has achieved remarkable economic success by transforming itself in a few years to the technology-driven economic powerhouse that it is today. Over the last 20 years Taiwan has concentrated on developing its high-tech industries, and is now a world leader in the development and production of electronic, information technology (IT), computer and semiconductor products. Taiwan's aim is to achieve the same kind of success and global standing in the industry of the future: biotechnology.
Taiwan has many advantages that give it the edge over its rivals in the field of biotechnology in Asia. These strengths are a combination of favourable technological advances and a deliberate attempt by the government to seek new frontiers in the field of science and technology. Some of these advantages Taiwan has as a leader in the field of biotechnology include:
• Availability of existing expertise in high technology which can be easily applied to biotechnology.
• Access to world-class research facilities.
• The island's strategic location, close to mainland China and proximity to the markets of Northeast and Southeast Asia.
• Easy availability of highly educated workforce, particularly in IT and biology.
• A well established legal framework.
• Access to abundant capital through a vibrant venture capital industry.
• Knowledge and experience of traditional herbal medicine practices.
Taiwan can already claim to be a leader in biotechnology and is often regarded by experts as the top biotechnology centre in Asia. However, Taiwan is not resting on its laurels and continues to work towards upgrading the competitiveness of its life science industries.
To help facilitate internationalisation of Taiwan's biotech industry, the government as well as planning and promotional organisations have all been working overtime to develop the ideal conditions for attracting international partners for sustained future growth of the industry.  As a result, the government has encouraged life science companies to locate in the island's science parks, which have been designed especially for high-technology industries. There are currently three prominent such science parks in operation - the Hsinchu Science Park and Southern Taiwan Science Park and the Taichung Science Park. Associated with these science parks are zones catering specifically for life science companies and Institutes, such as the Hsinchu Biomedical Science Park
NANOTECHNOLOGY: THE NEW FRONTIER
Taiwan aims to become a regional nanotechnology R&D centre for industrial applications and a key producer of nanotech products...
Manufactured products are made from atoms. The properties of those products depend on how those atoms are arranged. If you rearrange the atoms in coal you can make diamond. If you rearrange the atoms in sand (and add a few other trace elements) you can make computer chips. If you rearrange the atoms in dirt, water and air we can make potatoes.
Nanotechnology, a promising field in which materials are manipulated at the atomic level, is a new fronier  in science. It is also a key focus of Taiwan government's forward-looking economic development strategies to transform Taiwan into a "Green Silicon Island". By leveraging its powerful manufacturing base, together with increased research and innovation in nanotechnology, Taiwan aims to become a regional nanotechnology R&D centre for industrial applications and a key producer of nanotech products within a decade.
According to industry estimates, the annual output of Taiwan's nanotechnology industry is expected to top US$29 billion by 2010, representing 3 per cent of global market share. It also projects total market size for products differentiated by nanotechnology made by Taiwan manufacturers to be $19 billion by 2008, with 43 per cent in materials and chemicals, 22 per cent in metals and machinery and 35 per cent in electronics.
Taiwan has recently completed construction of the Taichung Science Park, a science-based industrial complex focusing on nanotechnology. A total of 60 high-tech firms have committed to invest some US$5.78 billion to start manufacturing operations in the park. As part of a larger high-tech hub in central Taiwan, the complex is expected to create 40,000-50,000 jobs when all 60 companies become fully operational.
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