According to reports from Taiwan's United Daily News on June 18, the Ministry of Economic Affairs stated that in light of South Korea's recent announcement regarding its next-generation power semiconductor development plans, Taiwan must increase its R&D investments to maintain industrial competitiveness amid intensifying global technological competition.
Earlier, Deputy Prime Minister and Minister of Economy and Finance Koo Yun-cheol outlined South Korea's 'Super Innovation Economic Project' during an emergency economic ministers' meeting in Seoul on June 12. He noted that the roadmap for commercializing next-generation power semiconductors would be completed by the end of June, with plans to initiate large-scale R&D projects linked to demand from companies.
Next-generation power semiconductors utilize materials such as silicon carbide (SiC) and gallium nitride (GaN) to reduce power loss and heat generation. These semiconductors are considered essential components for future strategic industries, including electric vehicles, renewable energy, and artificial intelligence (AI) data centers.
The Ministry of Economic Affairs highlighted that South Korea plans to invest over 500 billion won (approximately $375 million) in next-generation power semiconductor R&D, with the potential to expand the project scale to 750 billion won. This investment reflects South Korea's strong commitment to fostering its semiconductor industry.
The ministry cited OECD statistics indicating that Taiwan's total R&D investment over the past five years has not reached even half of South Korea's, and its R&D expenditure as a percentage of GDP is about 1 percentage point lower than that of South Korea. Additionally, Taiwan's overall R&D spending significantly lags behind Japan, indicating substantial room for growth in science and technology investment.
The Ministry of Economic Affairs noted that the government is continuously increasing its R&D resource allocation and supporting industry-academia-research collaboration through science and technology projects to promote the development of key technologies in future industries.
This year, the budget for science and technology projects in Taiwan is set at 30.2 billion New Taiwan dollars (approximately $1.4 billion), a 29% increase from the previous year. Of this, the budget for supporting industrial technology R&D has been allocated 10 billion New Taiwan dollars, marking a 53% increase compared to last year. The related budget proposal is currently under review by the Legislative Yuan's Economic Committee.
The Ministry of Economic Affairs emphasized that long-term investments in science and technology have led to semiconductor competitiveness. Taiwan Semiconductor Manufacturing Company (TSMC) originated from technology transfers from the Industrial Technology Research Institute (ITRI) and has recently seen the establishment of startups focused on inspection equipment and intellectual property (IP) in line with the growth of AI semiconductors.
Furthermore, global semiconductor companies like ASML and Micron have established R&D centers and advanced production bases in Taiwan, while major tech firms such as NVIDIA are also setting up research and development hubs there. The Ministry reiterated that these achievements demonstrate how R&D budget investments are translating into industrial competitiveness, underscoring the need for budget expansion.
Taiwan's President Lai Ching-te has previously declared this year as a pivotal one for Taiwan's 'smart prosperity,' committing to increase investments in core technologies such as silicon photonics, quantum science, and robotics.
* This article has been translated by AI.
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