Last week, the Executive Yuan finalized a draft amendment referred to as“Taiwan's Chips Act.”The draft is to be sent to the Legislative Yuan for review. However, the chairman and founder of Powerchip Technology Corporation, Frank Huang thinks it seems to benefit TSMC more than other companies, and that he will oppose the amendment.
The Executive Yuan approved the draft amendments to include Article 10-2 in the Statute for Industrial Innovation on Nov. 17, which proposes higher tax breaks on R&D expenses for high-tech companies. The proposal is to help steer investment back into the island and consolidate its competitive edge in the semiconductor and other sectors. Some experts say, however, that the proposed amendments don't offer as many benefits as other countries.
Wang Mei-hua, Minister, MOEA: “Taiwan has a well-established semiconductor ecosystem but we want to keep moving forward, that's why we proposed Article 10-2 to make some changes. There are other aspects to be addressed and we will pull them out for discussion in the future.”
There have also been reports saying that the global supply chain is shifting away from Taiwan. Economic Affairs Minister Wang Mei-hua said those reports of global tech firms cutting dependence on Taiwan-made chips are inaccurate; Taiwan is irreplaceable in the semiconductor industry, the ministry said. The ministry also added that Dutch semiconductor equipment manufacturer ASML will also be expanding its investment in Taiwan. The proposed amendment received positive responses from several semiconductor companies. However, chairperson and founder of Powerchip Technology Corporation, Frank Huang questioned and criticized that the amendment seems to benefit the Taiwan Semiconductor Manufacturing Co. (TSMC) more than other companies. This raised questions on the eligibility for the tax breaks and their coverage.
Chiu Hsien-chih, Legislator (NPP): “Make it clear on eligibility criteria for Article 10-2 and its coverage.”
Wang Mei-hua, Minister, MOEA: “We will conduct cross-agency discussions and consult experts. We will determine what areas are considered for the tax breaks.”
Yang Chiung-ying, Legislator (KMT): “What is your estimated timeline?”
Wang Mei-hua, Minister, MOEA: “We will finalize the draft in a month or two now that it's been passed. We will then present the final version of the amendment for discussion.”
Wang promised to present a final draft of the amendment as soon as possible. On another note, Wang added that Taiwan is also striving for a stronger presence in the global car industry by increasing its microchip production and supply.