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ICT to Taiwan

(Last updated: 31 Oct 2013)

Trends and opportunities

The market

Taiwan’s reputation as an advanced ICT country is supported by international surveys ranking the country as a leader in most discernible categories for ICT performance. The World Economic Forum ranks Taiwan at 11 out of 142 nations in 2012 for network readiness, highlighting Taiwan’s global competitiveness. Other measures similarly underscore the extent of Taiwan’s progress in developing ICT capabilities. In 2012, the internet popularisation rate in Taiwan was over 82.8 per cent, the number of mobile/wireless internet users in Taiwan increased rapidly to over 2 million and the number of regular users had reached over 1.1 million.

Taiwan’s market growth can be attributed to several factors:

  • The growing importance and awareness of e-commerce
  • Taiwan’s position as a major procurement centre for global ICT companies
  • The heightened use of information technology, particularly in the areas of web-based applications and electronic commerce
  • Recognition of the attributes of the B2B EC business model and its capabilities
  • The Taiwan Government’s promotional plans and strategies
  • The global logistics and supply chain management system requirements of foreign business partners of Taiwan hi-tech manufacturers
  • The necessity of appropriate information systems to manage migration of various industries to mainland China

(Source: Department of Industrial Technology, Ministry of Economic Affairs, 2011)

Hardware

As Taiwan strives to keep abreast of changes to requirements in ICT hardware, the focus on information/appliance products and wireless/WAN application products is expected to intensify.

Over the past few years, Hewlett-Packard, NEC, Fujitsu, Dell, Microsoft and Sony have all announced the establishment of R&D centres in Taiwan and currently 20 of the world’s top ICT OEMs and ODMs operate International Procurement Offices in Taiwan. Significant orders have been placed by OEMs for notebooks and a wide range of peripherals including mobile phones, wireless access cards and scanners.

Software

In 2012, the Taiwanese software market grew by 4.5 per cent. It’s estimated the value will have reached US$4.9 billion by 2013, an increase of 81.2 per cent since 2008. Taiwan accounts for 3.3 per cent of the Asia-Pacific software market’s value.

Growth is expected to continue due to:

  • The Taiwanese Government’s strong push and focus on e-commerce development
  • The online integrated supply chain management system between major OEMs and Taiwanese hardware manufacturers, which has now been extended to include full vertical integration of smaller component and systems suppliers to Taiwanese OEMs
  • Taiwanese manufacturers in China establishing efficient management systems

In general, output is generated by three main software categories:

  • Industry-specific computer software
  • Key software tools and components
  • Embedded software

In recent times, Taiwan has seen an accelerated development of locally developed software by Taiwanese companies, particularly in the multimedia sectors. Taiwanese game companies are now the biggest players in the Greater China region with increased local development in global logistics where locally developed software has better mirrored internal management systems and practices.

Gaming, digital animation and e-learning are expected to be the major drivers of the industry. Opportunities exist for Australian companies to provide and create digital content with and/or for broadcasters, mobile and wireless platforms, Internet platforms and multimedia software firms. In addition to cooperative arrangements, there are opportunities in human resource development.

Opportunities

It is estimated that considerable opportunities of about A$5.6 billion will be generated from the projects listed above. Opportunities for Australian businesses exist in the relevant areas, especially in the software, digital content provision, databases, and relevant service areas.

Capturing these opportunities will require strong links with local players in the market and there is already intense competition from established local and global vendors for major business opportunities in this national strategy.

The best opportunities in Taiwan's ICT industry for Australian exporters are:

  • Innovative software applications, particularly in games, and management application software
  • e-commerce and digital content for e-commerce, e-security, e-government and e-learning
  • Mobile games, content and applications
  • Intelligent transport systems
  • e-learning projects in Third World countries – Taiwan is keen to work with Australian software players as a consortium to bid for international projects sponsored by the United Nations or other international banking organisations

(Source: Directorate General of Budget, Accounting and Statistics, Executive Yuan, R.O.C. Market Intelligent Centre of Institute for Information Industry)

Marketing your products and services

Emerging small-medium sized companies in other Asia-Pacific nations are actively emulating the development model of Taiwanese firms, so a joint venture with a Taiwanese software manufacturer is certain to help you make the most of market opportunities.

The two most important issues to be addressed in marketing your IT products and services in Taiwan are to customise your products for Chinese consumers and get your brochures, catalogues, company profiles, capability statement and other promotional materials printed in traditional Chinese. In software, it is important to offer a two byte character capability if localisation is to be easily achieved.

Australian companies in the ICT sector are best advised to offer:

  • Flexible and competitive pricing strategies
  • Scalable capabilities
  • Strong local support and after sales service and working closely with a qualified local partner who can offer Mandarin speaking support

All the leading computer players work very closely with Taiwan’s ICT hardware manufacturers. Taiwan companies provide both OEM and ODMs – including product design and manufacture service for the world leading ICT brands. Australian players will compete with global software companies in bundling their software/application into the hardware manufacture.

Among the most notable of Taiwan's ongoing business-to-business (B2B) projects is the formation of supply-chain systems linking leading international IT firms and their domestic suppliers, together with the supply chains connecting leading domestic IT firms and their supporting factories. Those systems are being built up with subsidies from the Industrial Development Bureau of the Ministry of Economic Affairs.

Some e-marketplaces that have started up include:

  • com2B.com – established by Compaq, with a number of leading local firms, with the goal to develop an e-marketplace for a number of Taiwan’s major industries
  • e2Open – with a capital of US$200 million, it was established in mid-2000 as a joint venture between Acer Inc., IBM, Nortel, Toshiba, Hitachi, LG, Seagate, Lucent, and Solectron, which together boast a trading volume of US$700 billion annually
  • Converge (formerly known as eHitex.com) – set up as a joint venture with a capital of US$100 million by Mitac, Tatung, Compaq, AMC, Gateway, Infineon Technology, NEC, and Samsung, which among them have a total trading volume of US$650 billion a year

Many of Taiwan's IT firms are expected to join at least one of these marketplaces to take advantage of the rich business opportunities they will offer.

Links and industry contacts

ICT-related resources

com2B.com – www.com2b.com/com2b/ch5/english/aboutus.htm
e2Open – www.e2open.com
Institute for Information Industry – www.iii.org.tw/english/index.asp
Taipei Computer Association – www.tca.org.tw/index.asp?doc=about/about_tca
Taiwan Electronic and Electrical Manufacturer’s Association – www.teema.org.tw/index.asp

Media

Asia IT Report – http://mic.iii.org.tw/english/default.asp (monthly, in English)
DigiTimes – www.digitimes.com/index.asp (weekdays, in Chinese)

Contact details

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A list of Austrade offices (in alphabetical order of country) is also available.

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