 Taiwan: Telecoms and technology background
From the Economist Intelligence Unit
Taiwan is a global centre for the production, development and use of technology and telecommunications equipment. According to the Market Intelligence Centre (MIC, a quasi-official think-tank that studies trends in the IT industry), Taiwan was the fourth-largest producer of information technology (IT) hardware in the world in 2003, with US$11.9bn worth of IT equipment being produced.
The importance of Taiwanese companies in the IT industry is even more significant than these figures suggest. In an effort to save costs, in recent years Taiwan companies have moved much production overseas, particularly to mainland China. The total value of shipments of 14 key information and communications technology products shipped by Taiwanese firms in 2004 amounted to US$67.2bn, according to the MIC, up by 23% on 2003. Some 72.1% of this total was produced in China.
The movement offshore of much manufacturing capacity has been accompanied by an upgrading of the kind of activities that are left behind. Production in Taiwan of sophisticated semiconductors and liquid crystal displays (LCDs), for example, continues to rise. Firms in Taiwan have also been investing more in research and development (R&D), with total expenditure on R&D rising steadily from 1.8% of GDP in 1993 to 2.5% of GDP in 2003. Around 38% of R&D funding comes from the government.
According to Economist Intelligence Unit estimates, Taiwan had 21.9m mobile-phone subscribers in 2005, down from 22.8m in 2004, giving a penetration rate of 97%. The fall in subscribers is the first since explosive growth in the sector began in the late 1990s and is perhaps the first example of subscriber numbers falling in a developed market. The most likely explanation of the phenomenon is consolidation—in 2002-03 penetration rates exceeded 100%, with many users owning more than one device. Internet services have also experienced exponential growth over the past few years. According to our estimates, Taiwan had 14m Internet subscribers in 2005, up from 13.3m in 2004, representing a penetration rate of 62%.
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SOURCE: The Economist Intelligence Unit
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