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Taiwan has always been a key production site in the global communications industry. The continued expansion of demand from Internet of Things (IoT) and cloud applications, as well as the development of emerging technologies such as network virtualization, LPWAN, AI, 5G and edge computing will help power continuous growth of Taiwan's communications industry. It is worth noting that the 5G open architecture is expected to create business opportunities for foreign and Taiwanese companies in the development of 5G applications and services.


  • Taiwan has convenient transportation infrastructure.

  • Complete industrial chains.

  • Complete communications industrial clusters.

  • Taiwan government develops relevant laws and regulations to support.

  • Taiwan's communications companies have both manufacturing and global logistics capabilities. Their strengths include networking chips, parts and components, touch panels, and system integration. The industrial chain is relatively complete. In the future, foreign companies can invest in business opportunities offered by Taiwan's communications industry through collaborative R&D and technology transfers.

  • The US-China trade and tech wars have prompted several network communications operators to return to invest in Taiwan, and Taiwan's advantageous position has become more consolidated. Due to the unique characteristics of the 5G Open Radio Access Network (Open RAN), foreign and Taiwanese companies can work together to develop 5G applications and services.

  • Even as other countries around the world launching their own 5G development efforts, Taiwan already plays an important global role thanks to its lead in the development of key IC, modules, and terminal products. Taiwanese companies will have an opportunity to connect central office equipment to terminal equipment, then gradually complete the industrial value chain as they integrate 5G, cloud computing, IoT, and AI technologies, thereby becoming system solution suppliers.

  • Telecom operators in Taiwan are actively building their own 5G testing facilities. They aim to encourage vendors to experiment with different solutions by providing open networks and communications infrastructure. The integration of AI, IoT, and AR/VR technologies in particular should lead to the development of further business opportunities in vertical applications.

  • The COVID-19 pandemic has accelerated the development of the "three zero" business model — the zero-contact economy (remote work and online meetings), zero-human production (automatic production, warehousing, and logistics), and zero limits to applications (artificial intelligence and big data analysis). People are expected to have grown accustomed to the current consumption and lifestyle and the stay-at-home economy will continue to expand, which will increase the demand for network communication equipment and communication software. A convergence of the communications and medical industries to develop electronic quarantine and tracking systems in response to the pandemic may become a future trend as well.

  • As a key hub of the global communications industry, Taiwan is home to a number of communications hardware manufacturing systems. It can help foreign companies to conduct technology R&D, development of smart application systems, and subsequent commercialization and hardware production. Foreign companies can take advantage of these business opportunities through collaborative R&D and investment in Taiwan.

Focus of Policy

  • Smart Nation Program (2021-2025): Taiwan launched the "Digital Nation & Innovative Economic Development Program (2017-2025)" (DIGI+) at the end of 2016. DIGI+ places equal emphasis on software and hardware, and builds infrastructure that will benefit digital innovation and lay a solid foundation for a digital nation. In 2021, the DIGI+ Program was renamed and upgraded to the "Smart Nation Program (2021-2025)" and included information security, Beyond 5G (B5G) satellite communications, next-generation semiconductors, cloud era industry transformation, advanced network construction, and other advanced technologies to promote the overall digital transformation of the nation, society, and industries. In terms of communications infrastructure, Taiwan will accelerate 5G broadband construction and verification, complete advanced network construction, promote B5G satellite communications, enhance cybersecurity protection, create bandwidth policies, and implement legal adjustments to respond to the arrival of the digital society.deregulation, innovation, proofs of concepts, and forging connections
  • Taiwan 5G Action Plan (2019-2022): The Plan calls for an investment of NT$20.466 billion to implement deregulation, innovation, proofs of concepts, and forging of connections. Taiwan will develop various value-added and vertical application services in 5G telecommunications to establish Taiwan as an environment suitable for the development of innovative 5G applications, enhance digital competitiveness, promote industrial innovation, and create smart living.
  • Release of 5G bandwidths: The government in Taiwan has released 3.5GHz and 28GHz commercial bandwidths for telecommunications operators to provide 5G services to consumers and businesses. On the other hand, the 100MHz between 4.8GHz and 4.9GHz is dedicated to 5G applications. All industries may apply for site tests and license applications will be accepted in 2021 and 2022.
  • Asia New Bay Area 5G AIoT Innovation Park: The government plans to invest approximately NT$11 billion in 2021-2025 to set up an end-to-end application and demonstration site for 5G AIoT. Domestic and foreign telecommunications operators, cloud service providers, system integrators of all industries, and startup teams will adopt a "large companies supporting small companies" approach to form industrial clustering and attract domestic and foreign accelerators, incubators, and entire startup platforms. The aim is to create a comprehensive industrial ecosystem and become the largest 5G AIoT innovation testing facility in Taiwan.

Tax Incentives

  • The profit-seeking enterprise income tax rate is 20%.
  • Up to 15% of the company's R&D expenditures may be deducted from its profit-seeking enterprise income tax for current year; or up to 10% of such expenditures may be credited over three years against the profit-seeking enterprise income tax payable by the company.
  • Royalty payments to foreign companies for imported new production technologies or products that use patents, copyrights, or other special rights owned by foreign companies is, with the approval of the Industrial Development Bureau, MOEA, exempt from the corporate income tax.
  • Imported machinery which local manufacturers cannot produce are eligible for duty-free treatment.
  • Investment in smart machinery/5G: For investments of no less than NT$1 million and no more than NT$1 billion, either "5% of investment spending deducted from profit-seeking enterprise income tax (current FY)" or "3% of investment spending deducted from profit-seeking enterprise income tax, if total spending spread over three years" may be selected, but the total amount deducted may not exceed 30% of corporate income tax that year. The applicable period is expected to be extended to December 31, 2024.
  • A company employee who has obtained stock compensation worth a combined total of less than NT$5 million and continuously held the stock while remaining in the company's employ for at least two years may choose to be taxed on the market price of the stock at either the time the stock was obtained or the time the stock is sold, whichever is lower.
  • Foreign special professionals who meet criteria are eligible for a 50% deduction of total income tax for amounts exceeding NT$3 million.
  • Companies that set up operations in export processing zones, science industrial parks, or free trade ports are eligible for exemptions on import duties, commodity tax, and business tax for the import of machinery and equipment, ingredients, fuel, materials, and semi-finished products for their own use.
  • Companies that use undistributed earnings to engage in substantive investments may exclude the amount when calculating their profit-seeking enterprise income tax.

Research and Development Subsidies



Success Stories

Production and Technologies

Qualcomm announced the establishment of its "Center for Operations, Manufacturing Engineering and Testing in Taiwan (COMET)" in June 2019 and planned to set up excellence centers/laboratories such as the 5G mmWave testing center. Other cooperative undertakings have included Nokia's announcement at the end of 2019 that it would release a 5G baseband IC developed by MediaTek based on specifications issued by Intel. Dell and HP were expected to introduce the new IC on their 5G laptop computers in early 2021. Europe's multinational telecom operator Vodafone selected Accton subsidiaries Edgecore Networks and Alpha Networks, along with Delta Electronics subsidiary Delta Networks to develop disaggregated cell site gateways (DCSGs).

Testing Facilities

In August 2020, Cisco formed a partnership with domestic network communication equipment manufacturers to create the first "5G open architecture network platform" to jointly develop a dedicated 5G open architecture network and eco-system. Qualcomm joined forces with ASE and Chunghwa Telecom to create a dedicated 5G mmWave private network smart factory which was inaugurated in December 2020 and integrated the following three major applications into the production lines of ASE Group's Kaohsiung Plant.

Talent Development

To help industries discover local talent with creativity and design application abilities, the Industrial Development Bureau, MOEA established competition mechanisms to attract youths to the industries. The 2021 Mobile Heroes competitions focused on the Connected Future Challenge, Next-Generation 5G+ User Applications and Micro Base Station Antenna System Design Competition, 5G Pioneering Innovative Application Competition, and the Connectivity International Award for international submissions aimed at connecting international innovation with local industry talent.


Source: InvesTaiwan


Key Innovative Industries in Taiwan - Communication (15.5MB)