Taiwan is a tiny island in the heart of Asia-Pacific, but it has a huge impact on the world order. The island's rapid industrialization was catalyzed by the emergence of diverse manufacturing sectors, including textiles, small appliances, electronics, footwear, consumer electronics, sports equipment, semiconductors, and computer manufacturing.
According to Focus Taiwan, the leading think tank Chung-Hua Institution for Economic Research (CIER) has raised its forecast for the country’s 2024 gross domestic product (GDP) growth to 3.96 percent, which represents a 0.15 percentage point upgrade from its previous estimate of 3.81 percent in July. (https://focustaiwan.tw/
CIER chairman Lien Hsien-ming explained that the increased forecast is because of the booming demand for artificial intelligence (AI) applications that drives up Taiwan's exports, which in turn helped boost investment and steady growth in domestic demand.
Its more significant contribution to the global economy, however, the manufacturing of information and communication technology (ICT) products. Even in a hyper-competitive industry, Taiwanese companies remain at the cutting-edge of ICT innovation.
With extensive investments on research and development, Taiwanese companies have gained global recognition as a leader in the ICT sector. Its manufacturing prowess, production flexibility and resilient supply chain greatly helped the world recover from the economic slump brought about by the Covid-19 pandemic.
The ICT Ecosystem
“Taiwanese companies tend to form clusters around various industry subsegments, allowing them to collaborate and rapidly explore possibilities,” Dr Tzi-Cker Chiueh, vice president and general director of Information and Communications Research Laboratories at Taiwan’s Industrial Technology Research Institute (ITRI), told bbc.com about the island’s ICT ecosystem. “They find ways to improve on existing technologies and refine manufacturing efficiencies, allowing them to become globally competitive thanks to the speed of iterative innovation.” (https://bbc.in/41B3WOn)
Taiwan being an important partner in the global supply chain of semiconductor design and fabrication, Dr. Chieuh also emphasized that this ecosystem relies heavily on its people, with the country having a population of 23 million: “In our culture, everyone has a motivation to be in control of their own destiny. We also enjoy improving manufacturing processes, not just for ICT, but across various industries. This entrepreneurial spirit is a unique characteristic of Taiwan. Without such innovation-driven mindset, I doubt our ICT industry would have achieved its current level of global prominence.”
Future of Innovation
Change is the only constant in the ICT industry, and Taiwan is blazing the trail when it comes to adaptability. That means the future of Taiwan’s position as a hub for ICT innovation is secure.
Whether it is the Internet of Things, artificial intelligence or quantum computing, Taiwan and its enterprising companies are poised remain as a leader in the global market.
“Whatever the technology is, companies will still need innovative or next-generation processors optimised to execute specific algorithms. And that’s where the strengths of Taiwanese companies come in, to find ways to optimise the manufacturing process, and subsequently developing innovative product clusters derived from cutting-edge technologies,” explained Dr. Chiueh to the BBC. (https://bbc.in/41B3WOn)
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Resilient Supply Chain
According to the Taiwan International Trade Administration (TITA), Taiwan’s ICT industry was instrumental in the launch of Rakuten Mobile’s Open Radio Access Network (RAN) service in Japan in 2019, as majority of the core suppliers are Taiwanese telecom hardware manufacturers.
Moreover, TITA added that the “United States and Taiwan launched the U.S.-Taiwan Technology Trade and Investment Collaboration (TTIC) to help secure resilient supply chains in five key sectors: 5G, cybersecurity, semiconductors, renewable energy, and electric vehicles.”
The University of Nottingham Taiwan Research Hub’s online magazine, assessed that “Taiwan’s role in the global supply chain network and the persistently robust global demand for ICT products suggest that the island’s economy is likely to continue to gain momentum in the foreseeable future.”
Taiwan’s manufacturing economy has indeed been driven by its highly developed ICT industry, the importance of the ICT industry in Taiwan’s total manufacturing production value has increased. Electronic components and ICT products accounted for a substantial percentage of its total exports and its total imports in 2021. The semiconductor chips are also widely in demand in automobiles, artificial intelligence, military and other high technology products.
Global Advantage, Technological Edge
Taiwan’s strong industrial chain, technological edge, and integrated manufacturing capabilities in sensors and Internet of Things terminals give the island a global advantage in IoT industry development.
According to Taiwan Excellence (https://www.taiwanexcellence.
“In developed countries, 80% have access to Internet services, and the 50% population threshold is an important milestone in the popularization of the ICT industry.
“Mobile applications, such as ultra-high-quality images (8K) and 3D stereoscopic image display, are driving demand for broadband connection.
“The Internet of Things (IoT), big data analysis, cloud computing, artificial intelligence (AI), and block chain technologies will give rise to extensive innovation, fundamentally changing enterprises, the government, and society. This is expected to create a digital economy worth US$23 trillion by 2025.”
Strong ICT Industry Key to Success in the New 5G Era
2019 has been hailed as the year of 5G. The United States, European countries, Japan, and South Korea are all actively working to deploy 5G networks. The private research group Markets and Markets forecasts that the market scale will increase from US$700 million in 2020 to US$6.3 billion in 2025, with a compound annual growth rate (CAGR) of 55.4%.
Taiwan’s long experience in ICT development and its excellent hardware manufacturing capabilities gives the island a powerful advantage in 5G and IoT development.
“Taiwan has achieved the status of a key partner in the global ICT industry,” said Daniel Tsai, chairman of Taiwan Mobile Co. Ltd., as quoted by the Taiwan Excellence web site. “We’re the world’s No. 1 in terms of information hardware output.” (https://www.taiwanexcellence.
For more details, visit facebook.com/TaiwanExcellence.
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