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Ministry of Economic Affairs,R.O.C.

Administrative Reports

Minister Wang Mei-Hua's oral administrative report to the 3th session of the 11th Legislative Yuan

Minister Wang Mei-Hua's oral administrative report to the 1st session of the 11th Congress of the Legislative Yuan, the 3rd Plenary Meeting of the Economics Committee


The following content is a translation of excerpts from the Minister's report.

Dear Chairman and Legislators,

It is such a pleasure for me to deliver the Administrative Report of the Ministry of Economic Affairs (MOEA) before the Economics Committee. I will briefly explain the current economic circumstances and the focus of the MOEA’s administration. Please advise as necessary.

Current Economic Situation

Last year (2023), the global economy was shrouded in an environment of high inflation, high interest rates, and weakened terminal demand, inhibiting the economic growth momentum of various countries. Based on the foundation laid by Taiwan in decentralized market, diversification planning, and years of promotion of industrial transformation, Taiwan's export exceeded US$430 billion last year for the third consecutive year, and private consumption also exceeded a record high of US$11 trillion, with an 8.3% growth, the largest in the past 30 years. The increase demonstrates the energy and resilience of Taiwan's industry and economy.

Looking forward to this year (2024), as the global inflation pressure eases, industry destocking comes to an end, and global trade momentum improves, both the IMF and WTO predict that global trade will grow significantly this year. Furthermore, increasing business opportunities in the application of emerging technologies, such as artificial intelligence, automotive electronics, will be beneficial to our country, whose growth is largely driven by external demand. Coupled with the Olympic and European Cup sports events, traditional industries such as textiles and shoemaking will also benefit. Private consumption is expected to grow steadily, due to increase in wages. The Directorate General of Budget, Accounting and Statistics (DGBAS) of Executive Yuan predicts that Taiwan’s economic growth will reach 3.43% this year.

Direction and Implementation of the MOEA's Administration

The MOEA will continue to build resilient water supply and electricity networks and create a secure investment and living environment. We will also spare no effort to develop renewable energy and implement in-depth energy conservation measures to conform to the global net-zero trend and met green supply chain requirements. As countries rush to join the AI competition, we will use our advantages in the semiconductor sector to accelerate the application of AI and strive for securing Taiwan's key position in global AI development. Relying on the industrial strength we have established, we will deepen international economic and trade exchanges and build a resilient and secure supply chain with allied countries.

  1. Consolidate Semiconductor Advantages and Deepen Industrial Application of AI

Taiwan's semiconductor industry is in a leading position globally, providing more than 60% of production capacity of the advanced fabrication process. To entice manufacturers to continue investing and expanding factories in Taiwan, we will integrate water supply, electricity, land and other resources cross-departmentally, so that manufacturers will keep the most advanced process technology and IC packaging, and main production capacity in Taiwan. Last year, we successfully attracted leading international semiconductor equipment and materials manufacturers to invest more than NT$47 billion in Taiwan, while new procurement exceeded NT$20 billion. This year, we will provide guidance to companies to invest in nano-level process equipment and advanced packaging materials so as to increase the proportion of proprietary semiconductor equipment and materials, and help domestic small and medium-sized manufacturers join the supply chain.

AI will be the key to driving a new wave of industrial investment and breakthroughs in digital transformation. Taiwan possesses a comprehensive AI server supply chain and chip R&D ecosystem. By combining innovation in chip making, we will conduct the planning in key AI chip technologies and develop AI chip compiler software and technology, and generative AI chips on mobile devices. We work to develop high-end applications such as smart manufacturing, high-performance computing, unmanned vehicles, and drones, as well as promoting adoption of AI generative applications in fields such as transmission, manufacturing, and corporate marketing to assist all walks of life in accelerating transformation and upgrading. In particular, for service industries facing labor shortages, we will help them utilize AIoT technology and adopt cloud and AI application services to improve manpower efficiency, alleviate manpower shortages, and accelerate the intelligent transformation of the overall business service industry. The MOEA will also introduce generative AI models, which will first be adopted by state-owned enterprises for exemplification purposes, e.g., applying in smart customer service to improve customer service efficiency and satisfaction. Utilization of the models will be expanded to private enterprises in the future.

  1. Provide Guidance on Industry Upgrades and Assist Enterprises in Adapting to Changing Circumstances

To provide incentives for investment in industrial innovation, Article 10-1 of the “Statute for Industrial Innovation” will be revised this year. In addition to extending the applicable period, we will also deliberate on incorporating AI applications and net-zero emissions in the scope of investment tax credits. Meanwhile, for certain traditional industries, and small and medium-sized enterprises that are still affected by the sluggish economy, we will continue to utilize the post-epidemic special budget to guide them to implement low-carbon and smart upgrades. Furthermore, for industries affected by the cancellation of tariff concessions for certain ECFA products, we have planned to create cross-industry alliances to strengthen overseas sales, where we organize groups to visit India, ASEAN, Africa and other emerging markets. We will also assist in the development of high-value/differentiated products to enhance their international competitiveness.

Small and medium-sized enterprises account for 80% of Taiwan's employment. To optimize the incentives for small and medium-sized enterprises to increase wages and retain talents, an amendment to Article 36-2 of the “Act for Development of Small and Medium Enterprises” is proposed to extend the tax credit for wage increases for ten years and remove the activation threshold, making tax concessions available on a regular basis. In the meantime, tax credits for wages can be increased to 150%, and the applicable wage range can be expanded to NT$62,000.

  1. Stable Water and Electricity Supply to Meet Industry and Domestic Consumption

Stable power supply is crucial to meeting domestic consumption and industrial development. In addition to incorporating various new renewable energy sources in the future, a mid- to long-term plan to stabilize power supply has also been formulated. This year, we expect that gas-fired units supplying 4.43 million kilowatts will be added to power generation. Deducting units supplying 3.15 million kilowatts which will be decommissioned, the net increase in power supply will amount to approximately 1.28 million kilowatts, therefore adequately maintaining stable power supply. Meanwhile, to strengthen the resilience of our power grid, NT$72 billion is expected to be invested this year to promote direct supply of power to industrial parks, expand energy storage equipment, and improve circuits and transformers.

In terms of water supply, the Tsengwen/Nanhua Interconnecting Pipeline is scheduled to go on trial operation by the end of May this year, giving the Tsengwen and Nanhua Reservoirs a "two-way backup" adjustment capability. In addition, the Feitsui Raw Water Pipe Project and the Taoyuan-Hsinchu Backup Pipeline are scheduled to be opened in June this year, and the water infusion of the Wu River Niaozueitan Artificial Lake will be completed in June this year, all of which are expected to improve the resilience of water supply in the Greater Taipei area, Taoyuan, Hsinchu, Changhua, Nantou etc. For outlying islands, the construction of Jibei and Cimei Seawater Desalination Plants in Penghu will be completed by the end of the year, which will increase Penghu's water supply capacity and promote local tourism.

  1. Turn Challenges into Opportunities and Keep Up with the International Net-Zero Trend

The development of renewable energy is the key to the country's net-zero transformation and energy independence. Last year, the number of solar photovoltaic installations increased by 2.7GW, which is a record high. The cumulative grid connection amounted to 12.5GW by the end of January this year. At present, we have secured sufficient resources, and collaboration efforts between various departments and local governments are made to achieve the 20GW installation target in 2025. As of the end of January this year, a total of 288 wind turbines had been installed in offshore wind power plants, amounting to installation capacity of 2.3GW. We are one of the few countries in the world with offshore wind power exceeding 2GW. In addition, hydrogen energy and geothermal energy have also been listed as our focus of forward-looking energy planning this year. Spearheaded by state-owned enterprises, demonstrations of hydrogen energy will be conducted in power generation, industry and transportation, including certification of 5% hydrogen blending power generation, development of “methane pyrolysis” power generation technology, and certification of co-production between steel and petrochemical plants. As for geothermal development, the cumulative installation capacity of six sites has amounted to 7.29MW currently, and another 5MW is expected to be added this year.

COP28 proposed an energy efficiency doubling initiative to increase the average annual improvement rate of energy efficiency from 2% to 4% in 2030. Since 2016, Taiwan has engaged in three major efforts, namely energy transformation, energy conservation promotion and production process improvement. As a result, we have managed to achieve an average annual energy efficiency improvement of 4% in the past five years (2018-2022). Building on our achievements, we will comprehensively improve industrial and residential energy efficiency to achieve “in-depth energy conservation.” In the meantime, in response to the EU's implementation of the Carbon Border Adjustment Mechanism (CBAM) transitional phase last October, workshops and briefings regarding CBAM reporting on carbon content of products were initiated last year. This year, “regional reporting service windows” will be established in the northern, central and southern Taiwan to provide geographical convenience to businesses when they source for assistance in reporting.

  1. Invest in Taiwan to Fortify Enterprise Foundation, and Secure International Business Opportunities

Since the launch of the “Three Major Programs for Investing in Taiwan” in 2019, we have successfully guided Taiwanese businesses affected by the US-China trade conflict to move high value-added production back to Taiwan. Coupled with the expansion of investment by local companies, the cumulative investment as of February this year amounted to nearly NT$2.18 trillion, creating employment for nearly 150,000 people. In addition, to help secure overseas business opportunities for the manufacturing sector in Taiwan and diversify the export market, apart from consolidating the United States, Japanese and European markets and taking root in the new southbound market, we also work to venture into emerging markets such as the Middle East, Central and South American, and African markets. This year, we expect sales promotion will garner nearly NT$5 billion in expenditure, where more than 200 events, including group tours and business opportunity days, will be held, helping businesses seize opportunities in emerging markets.

One of Taiwan's major wafer manufacturers has invested and constructed factories in Japan to establish a model of cooperation in semiconductor supply chain. Such measure has not only promoted cooperation between enterprises in both Taiwan and Japan, but also prompted Japan's largest semiconductor equipment manufacturers and electronic materials manufacturers to increase investment in Taiwan. Furthermore, we will continue to conduct in-depth exchanges with the United States and the European Union through communication channels such as the Economic Prosperity Partnership Dialogue (EPPD), Technology Trade and Investment Collaboration Framework (TTIC), Trade and Investment Dialogue (TID), and Industrial Policy Dialogue (IPD), so as to promote further bilateral cooperation between industries.


In the future, as industrial competition, as well as geopolitical competition and cooperation intensify, we will encounter more challenges. Nevertheless, new business opportunities will be presented. The MOEA will work to be the best economic helmsman, guiding the industry to use AI to drive the dual digital and net-zero transformation. We will deepen global diversification, continue to attract foreign investment to strengthen the standing of Taiwan, and lead the country to establish a key position in the international supply chain.