Invest in TaiwanDepartment of Investment Services, MOEA
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Taiwan's materials and fine chemicals industry boasts a complete supply chain – upstream, midstream and downstream – which gives it one of the most competitive advantages in the Asia-Pacific region. The production value of this industry has averaged more than US$40 billion annually, supplying the domestic as well as major world markets. Taiwan is the world's largest producer of Acrylonitrile Butadiene Styrene (ABS), the second largest supplier of Purified Terephthalic Acid (PTAs), Polyurethane (PU) leather, Thermoplastic Elastomer (TPE), and the fourth largest in Polyvinyl Chloride (PVCs).
With a well-developed supply chain and marketing channels around the world, Taiwan plays a key role in many markets today. In fact, a growing number of leading companies have become important players in international markets -- prominent companies include Chi-Mei Corp (the largest ABS manufacturer in the world), Nan Ya Plastics and Formosa Plastics in the materials industry, and UPC and Lee Chang Yung Chemical in the fine chemicals industry. Other companies such as Eternal Chemical and Chang Chun Plastics in the electronic materials industry, and Shiseido Taiwan, Taiwan Sugar, and Taiwan Salt in the cosmetics industry are already well-established in their respective markets.
Taiwan's materials and fine chemicals product applications are currently focused on semiconductors, plate display materials, print circuit boards, nanotechnology materials, and other high value-added products. The booming electronics, semiconductor, display, optoelectronics, communications, green industry and other downstream sectors with rapidly expanding market demand have become a major drive for greater innovation in specialized materials and chemicals.
Taiwan's materials and fine chemicals industry is surging ahead with the development of high added-value products. The outlook for applications in the high-tech and IT industries is very positive.
LED-application products continue to diversify and are meeting ever more stringent requirements for energy efficiency. Already considered a "star industry" by the government, LED production value totaled NTD 1.5 billion in 2006, growing 50% year-on-year. Taiwan is the world's second largest LED supplier, with a global market share exceeding 20% - second only to Japan. When looking at LED die individually, Taiwan is the global leader in blue LED and P4 LED die production, with a global market share of 34% and 85%, respectively. Among comparable supply chains, Taiwan is unrivaled in LED packaging and takes second for mid-stream die production. The challenge now facing Taiwan's LED manufacturers is how to gain an advantage in LED patents and take aim at the leading global position currently held by Japan.
In recent years the production value for polymer materials and fine chemicals has experienced steady growth in Taiwan. This growth has been accompanied by several important accomplishments in the field, including the following:
Taiwan is home to a great number of talented and highly-educated R&D and design professionals, as well as a number of materials and chemicals R&D centers established and/or supported by the government, the Industrial Technology Research Institute (ITRI), and colleges and universities. These outstanding qualities make the island a more advantageous location for multinational companies to localize as part of their globalization strategy. In addition, Taiwan's materials and chemicals manufacturers simply excel at production process and cost control, giving Taiwan yet another striking advantage on the global market.
The incredible success of Taiwan's optoelectronics and semiconductor industries has fueled ever-greater demand for fine chemicals and functional materials, leading to new opportunities for growth in related industries.
Another advantage Taiwan holds is its government's active support for related research projects. In order to facilitate technological advancement and encourage value-up development within the industry, the government increased the annual budget for technological development by 10.8% in 2007 – much higher than the 7.9% averaged in the previous three years. The government's current economic stimulus program --entitled Economic Development Vision for 2015 -- Stage I: Three-year Sprint Program (2007-2009) – has listed several funding initiatives, including allocations for government-backed research projects and innovative R&D. Private businesses may also apply to receive this funding. The program also includes incentives for property rentals, financial assistance, and taxes. Such funding and incentives will provide strong support for upcoming development in the industry.
Taiwan affords vast opportunities for both international and domestic firms. Also, as the demand for environmentally-friendly, energy-efficient technology and products grow, the materials and fine chemicals industry will continue to play a key role in supplying the high-tech manufacturing sector with the means to meet such requirements. With its strategic geographical location, advanced industrial clustering, thorough planning for industrial zones, highly developed industrial parks, and extensive experience in global trade, Taiwan is the ideal center for manufacturing and market development in the Asia-Pacific region.
According to statistics for Taiwan provided by ITRI, the production value of upstream panel materials totaled NTD 360 billion in 2006, growing 35.5% year-on-year. Based on a slightly earlier forecast made by ITRI, the production value for special-application chemicals was expected to climb to NTD 235 billion in 2005. Backed by 'encouragement' measures and policies from the Industrial Development Bureau, MOEA, the electronic materials sector could see their annual production value climb to as high as NTD 270 billion by 2008. The production value target for solar cell materials has been set at NTD 22 billion for 2010, with self-sufficiency at 50%.
The key to success in the field of high-tech is the industry's command of raw materials. Production and refinement of these materials is absolutely necessary to maintain the competitiveness of the industry. Taiwan is a major global production center for electronics and IT products; related industries in Taiwan are now concentrating on self-sufficiency in upstream materials as well as strengthening innovative R&D.
The Executive Yuan has named progressive technology for materials and chemicals as a focal point for strategic development. The government is encouraging greater development in nanometer technology, electronic materials, polymer materials, energy materials, eco-materials, special-application chemicals, and high-performance metals among others. Mid-phase development is zooming in on functional fine chemicals and high-performance processes. Now that the eco-friendly trend has gone global, industries are making the conservation of energy and resources, as well as the restriction of hazardous substances, priority objectives. The research and development of Green materials, the design of Green production processes, and emphasis on recyclable materials made with no harmful substances are all key factors that need to be considered in future development strategies. To attain a value-up, self-sufficient industrial base, we need to cultivate the needed manpower and put more energy into innovative R&D, as well as encourage overseas companies to conduct technology transfers or establish production facilities in Taiwan, so as to lower reliance on imported materials.
Materials are the prerequisites for any type of manufacturing and are usually the products with greatest value in the industry supply chain. The Asia-Pacific region is positioning itself to become the largest manufacturing hub in the world, and Taiwan, with its geographical location and industrial framework, is the undisputed matrix of this growing production center. Taiwan thus continues to develop key materials and fine chemicals in order to take advantage of this position and keep its core industries firmly rooted in Taiwan. With the support and active involvement of the government and manufacturers, the productivity and creative value of the materials and fine chemicals sectors is set to take off in the next few years.
As a world leader in science and technology, DuPont produces specialty chemicals, pharmaceuticals and biotechnology as well as other high quality, high performance materials. Since establishing DuPont Taiwan in 1968, With approximately 600 employees, DuPont Taiwan originally provided crop protection products in Taiwan, but later developed other specialty chemicals for Taiwan's electronics, chemical, composite, and synthetic fiber industries. DuPont Taiwan has invested in the construction of three manufacturing plants: the Longtan Crop Protection Plant, the Taoyuan Electronics Materials Plant, and the Guanyin TiO2 Plant. The company has also made major investments in related local companies. DuPont has also established a materials technology and applications development center in Taiwan that is initially focusing on Green Energy, Circuit Materials, flat panel display and other electronics and communications industry areas.
Also taking on a major role in Green energy development, DuPont Taiwan has formed a solar cell laboratory in Taoyuan for the research and development of related materials. In 2006, with an initial investment of NTD 300 million, DuPont launched its Semiconductor Materials Technical Center (SMTC) in the Hsinchu Science-Based Industrial Park. Affirming the positive growth of the "two-trillion, two-star" industries as well as the solid foundation for high-tech and electronics, DuPont is planning to construct a flat-panel display laboratory in Taiwan in the third quarter of 2007. DuPont will then form partnerships with CMO, AUO and other display giants for the joint development of key materials for seventh and eighth-generation panels.
U.S. Corning's first investment in Taiwan began in 1971 when it established the Pacific Glass Corporation. In 1981, Corning established Taiwan Corning Display Technologies as its local subsidiary, focusing primarily on supply glass substrate for the TFT-LCD industry. In May 2001, Taiwan Corning Display Technologies built its first glass substrate production facility in Tainan Science Park, employing Corning's proprietary fusion process. In March 2004 Corning Display technologies completed construction on a melting furnace and forming factory to support Taiwan's panel makers in meeting the increasing demand for glass substrates.
Developing in sync with the trend toward universal LCD and LCD TV applications, in April 2004 Corning began construction on its second TFT-LCD glass substrate fab in the Central Taiwan Science Park (Taichung). The fab officially started up operations in January 2006, with production focusing on large-size substrate. Once expansion plans are completed, the Taichung fab will become the largest LCD substrate production center in the world.
JSR Micro Taiwan was established in March 2005. A subsidiary of Japan-based JSR (Japan Synthetic Rubber Corporation), the largest color resist manufacturer in the world, JSR Micro Taiwan was the first company to move into the Yunlin site of the Central Taiwan Science Park, setting up facilities for the production of pigment dispersed color resist. Volume production officially began in July 2006. JSR Micro Taiwan now supplies more than 60% of domestic demand for fine chemicals needed in color filter production. The company plans to diversify its product line to include liquid-crystal materials. In order to strengthen business relations with downstream optoelectronics enterprises, JSR Micro Taiwan is now submitting an application for a third production facility in the Huwei site of the Central Taiwan Science Park. After the completion of production lines for color resist, photo spacers and insulator film, JSR Micro Taiwan will have invested approximately 3 billion yen. This investment means more time-effective procurement, lower costs, and greater competitiveness for Taiwanese businesses.
Rasa Technology Taiwan is located in the Chungkang Export Processing Zone. As a subsidiary of RASA Industries, Ltd., Rasa Technology Taiwan is also an affiliate of Mitsubishi Corporation and Mitsubishi Electric Taiwan. Rasa Technology Taiwan produces high-purity phosphoric acid, mainly used as an etching agent in the production of LCD panels and semiconductors. In response to capacity expansion at panel heavyweights AUO and Chunghwa Picture Tubes – expansion that is expected to increase demand for upstream materials like phosphoric acid – Rasa Technology Taiwan invested approximately NTD 300 million to expand its production facilities. Construction was completed in the last half of 2006, raising the company's maximum annual supply to 20,000 metric tons, sufficient to meet demand from the LCD panel and semiconductor industries.
Sources: MOEA, Department of Industrial Technology (DoIT), National Applied Research Laboratories (NARL), Industrial Technology Research Institute (ITRI), Industrial Development Bureau (IDB), Department of Investment Services (DOIS), and Taiwan Corning's website
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