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The application period for the tax incentives under Taiwan’s Chip Act ended in late May. According to a report from the Economic Daily News, the Ministry of Economic Affairs announced on June 3rd that four semiconductor-related companies have applied, with the review process expected to be completed by mid to late July. Reportedly, it is said that major semiconductor companies, such as TSMC and MediaTek, have submitted their applications.
Under this act, eligible companies can benefit from certain tax deduction measures, including a 25% tax deduction for expenses on cutting-edge innovative R&D expenses and a 5% deduction on expenses of advanced process equipment, reportedly to be the most generous tax deduction measures ever in Taiwan.
The first round of applications from enterprises was accepted in February of this year, with the deadline on May 31st.
Regarding the eligibility criteria, according to the investment deduction measures announced by the Ministry of Economic Affairs, an eligibility company’s R&D expenses must reach NTD 6 billion, while its R&D intensity be at least 6%, and expenditures on equipment for advanced processes must reach NTD 10 billion.
The aforementioned criteria are not restricted by industry category. However, an effective tax rate of 12% for 2023 is required to qualify for the tax reductions under Article 10-2 of the Statute for Industrial Innovation.
Per the same report, it is understood that in 2023, there are nine listed companies meeting the two major thresholds, namely, reaching the NTD 6 billion threshold for R&D expenses and an R&D intensity of 6%, of which TSMC and MediaTek may potentially benefit from.
The Industrial Development Bureau stated that only four companies have applied for the tax benefits under the Taiwan Chip Act. They did not disclose the names of these companies, only mentioning that all applicants are semiconductor-related firms. It is widely anticipated that TSMC and MediaTek, the two most competitive companies in the country with the highest investment in R&D, are likely to benefit from the Taiwan Chip Act.
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(Photo credit: TSMC)
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On May 30th, Taiwanese Minister of Ministry of Economic Affairs, J.W. Kuo, proposed a crucial industry policy. According to a report from China Times, the first step is to take Taiwan’s manufacturing parks global, with the initial site planned for Kyushu, in conjunction with TSMC’s Kumamoto fab, to create a semiconductor industrial park.
Additionally, the ministry reportedly plans to invite the world’s top 100 companies to set up sales offices in Taiwan as well as offering tax incentives, to attract around 400 million consumers from Japan, South Korea, the Philippines, Vietnam, and other regions.
Kuo further emphasized the importance of the government’s proactive stance on taking small and medium-sized enterprises (SMEs) and their supply chains overseas. The Ministry of Economic Affairs is said to be planning to utilize state-owned enterprises or establish a development service company to help eliminate obstacles to overseas investment. Meanwhile, it also plans to establish an overseas one-stop service window to expedite the setup of plants by companies.
He then pointed out that TSMC already has two fabs in Kumamoto, Japan. The plan, as per the same report, is to set up a semiconductor industrial park in Kyushu, bringing Taiwan’s supply chain to Japan. This park will not only serve TSMC but also local Japanese companies.
Looking ahead, the industrial parks will primarily follow TSMC, expanding to Japan, the USA, and Germany, with plans to relocate 10 to 15% of the supply chain capacity.
Kuo expressed the vision of considering Japan, South Korea, the Philippines, and Vietnam, all within a three-hour flight radius, as Taiwan’s domestic market. Additionally, within four years, the goal is to attract 500 Michelin-starred restaurants, along with popular performances and medical beauty services, to draw consumers from neighboring Asian countries to Taiwan.
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(Photo credit: TSMC)
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DRAM giant Nanya Technology held its shareholder meeting earlier today, during which Chairman Chia-Chau Wu reported on the company’s operations. According to a report from UDN, He mentioned that despite challenges such as unfavorable market conditions, geopolitical tensions, and the US-China trade conflict, Nanya Technology experienced a transition from profit to loss last year.
Nevertheless, the company continues to possess strong technological capabilities. This year, Nanya plans to introduce more products using the 10nm 1B process. Additionally, the 10nm 1C process is set to complete its first product design by the end of this year and begin trial production early next year. In 2026, Nanya will introduce new facilities, and by integrating miniaturization and Through-Silicon Via (TSV) processes, it will enter the high-capacity DRAM module market to meet the demand from the server market.
Wu emphasized that the 1B process products are Nanya Technology’s key expansion focus this year. In addition to promoting 8Gb/4Gb DDR4 to the personal computer and bare die application markets, the 16Gb DDR5 will initially target mainstream markets, including personal computers and servers.
Wu further highlighted that Nanya Technology continues to invest in research and development during the industry’s adjustment period to strengthen its future competitiveness.
Currently, in addition to developing three products under the second-generation 10nm (1B) process, Nanya Technology is also developing four other products: 16Gb DDR5 and miniaturized versions, 16Gb LPDDR4, 16Gb LPDDR5, and 4Gb DDR3, which will also gradually enter trial production.
He added that this year, Nanya Technology will simultaneously develop Through-Silicon Via (TSV) process technology. In the future, by combining the miniaturized DDR5 with the TSV process, Nanya aims to produce high-capacity DRAM modules to meet the demand of the server market.
Furthermore, the third-generation 10nm (1C) process technology is on track, with the design of the first 16Gb DDR5 product expected to be completed by the end of the year and trial production beginning early next year.
To support the transition to the 1B process and the construction of new facilities, Nanya Technology’s capital expenditure for this year is approximately TWD 26 billion (roughly USD 805.2 million), with less than half of the budget allocated to production equipment.
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(Photo credit: Nanya Technology)
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Due to escalating geopolitical risks, Tesla is reportedly requesting its suppliers to begin manufacturing components and parts outside of China and Taiwan as early as 2025.
According to a report from Nikkei News on May 23rd, citing sources from the supply chain, suppliers of printed circuit boards, panels, and electronic controllers for models sold outside of China have recently received requests from Tesla to avoid China and Taiwan. The reason cited is the increasing geopolitical risks in the Greater China region prior to the U.S. presidential election. The objective of this move is to create alternative supply sources for markets outside of China to avoid disruptions in the supply chain.
Reportedly, a Taiwan-based supplier of Tesla revealed that Tesla wants all components to be OOC, OOT, meaning ‘out of China’ and ‘out of Taiwan.’ Allegedly, they hope this proposal can be implemented in new projects next year. Tesla is said to have made this request before the US government increased tariffs on Chinese electric cars fourfold to 100%.
Nikkei News’ report also indicates that Tesla has discussed this issue with suppliers in Japan, South Korea, and other Asian countries. A component supplier source cited in the same report mentioned that his company has responded to Tesla’s request by expanding production in Thailand. The source claimed that for many customers like Tesla, the “China Plus One” strategy—which involves diversifying investments beyond China into other countries—also includes avoiding Taiwan.
The report further cited sources, indicating that American car manufacturers such as General Motors and Ford are also instructing their suppliers to explore on relocating their electronic production lines away from China and Taiwan. However, they have not formally made requests similar to Tesla’s.
Another source cited in the report remarked that Tesla is the most proactive among American automakers in wanting to avoid risks associated with China and Taiwan, but implementing the OOC and OOT strategy is indeed challenging and costly.
Tesla has previously placed orders with TSMC for numerous chips related to electric vehicles. For instance, the supercomputer chip “D1” is utilizing TSMC’s 7nm technology along with advanced packaging processes.
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(Photo credit: Tesla)
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Astera Labs, a leading provider of AI server connectivity solutions, has announced that it will gather Taiwanese manufacturers to establish its first Cloud-Scale Interop Lab outside of Silicon Valley in Taiwan. According to a report from Commercial Times, the company will closely collaborate with major Taiwanese ODM clients, while key manufacturers such as Quanta, Inventec, Wistron, Wiwynn, and Foxconn are expected to benefit from this initiative.
The emerging AI company Astera Labs has surpassed a market value of USD 10 billion and is renowned for providing high-speed transmission interface solutions for AI servers. Founded in 2017, the company celebrated its new public listing on NASDAQ this March.
Per a report from Business Today, the company, headquartered in California, USA, specializes in Retimer chips used for transmission in cloud data centers. These chips mitigate electronic signal attenuation issues, making them widely adopted in the market following PCIe Gen 5.
In response to the rapid expansion of the AI server market, Astera Labs is following in NVIDIA’s footsteps by establishing an R&D center, the Cloud-Scale Interop Lab, in Taiwan.
The report from Business Today further addresses that, according to Astera Labs’ financial reports last year, 60% of the company’s revenue came from Taiwan. Sanjay Gajendra, President and Chief Operating Officer of Astera Labs, stated that most of the company’s clients are major server ODMs based in Taiwan. In addition to server ODMs, TSMC is also an important partner for Astera Labs.
Sanjay pointed out that TSMC was an early investor in Astera Labs, and the company’s chips are all manufactured using TSMC’s cutting-edge processes. He also revealed plans to meet with TSMC’s CFO during this visit.
Sanjay Gajendra emphasized that the company will quickly expand its team, using Taiwan as a base in the Asia-Pacific region to support the PCIe 6.x test suite. This initiative aims to help businesses rapidly track and deploy solutions, enabling customers to integrate Aries 6 and achieve the industry’s lowest power consumption for PCIe 6.x and CXL 3.x Retimers.
NVIDIA’s next-generation GPU power consumption will reach 1400 watts. Sanjay Gajendra revealed that Astera’s technology is fully integrated into AI servers. As chip designs become increasingly complex, PCIe 6 achieves rapid data transmission for chips and can also connect GPUs across multiple racks.
In response to Astera Labs’ expansion in Taiwan, as per a report from TechNews, the aforementioned partners, including Quanta, Inventec, Wistron, Wiwynn, and Foxconn, have expressed their anticipation for this development. Foxconn has stated that it looks forward to continued collaboration with Astera Labs, fully utilizing the rigorously tested and field-validated PCIe/CXL Retimer solutions in its systems.
Quanta highlighted that the powerful Aries 6 Retimers, tested at the newly established Cloud-Scale Interop Lab in Taiwan, will enhance the promotion of reliable PCIe 6.x connectivity in next-generation AI and cloud infrastructure. Inventec, Wistron, and Wiwynn also remarked that the collaboration between both parties will continue to strengthen with the establishment of the R&D center in Taiwan.
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(Photo credit: Astera Labs)