Preface
With globalization and a knowledge-based economy becoming a worldwide trend, global economic developments tend to be more spontaneous and transparent. Moreover, interconnections between economic entities and their mutual influences increase daily, creating opportunities for growth and industrial development on the one hand, but fueling competition on the other.

Keeping ahead of today’s intense competition necessitates an efficient use of Taiwan’s latent technology strengths, putting more impetus on forward-thinking, cross-sector integration, and creation of new industrial opportunities. The Government’s policies on industrial innovation, improvements in research capability, and enhancing the values of the service and manufacturing industries play a vital role in transforming Taiwan’s industry from being “efficiency-oriented” to being “innovation-oriented”. These policies will remain the main engine of industrial development.

In this regard, the Department of Industrial Technology under the Ministry of Economic Affairs supports the Industry and Technology Intelligence Services (ITIS) in its mission to integrate the resources of major professional think tanks, scrutinizing and analyzing the entire industrial development environment. This involves placing a particular focus on future markets, technology anticipation, discussions about potential opportunities, bringing together derivative capital knowledge, and developing knowledge-based integration services.

Topics of research for industrial development require more openness and a greater emphasis on valuing professional suggestions from different circles in formulating major industrial topics, tackling problems through strategic approaches, and providing candid suggestions to assist businesses in mastering global trends. By improving the chains of industrial value-added developments, efficiently equipping indigenous industries with global resources for optimum investment positions, and refocusing on “Taiwan Innovation”, industrial development can be reshaped to outmaneuver global competition.

To welcome the year 2008, the ITIS program addresses these important issues in this publication “Insights into Taiwanese Manufacturing–Retrospective Snapshots and Outlook for 2008”. The included research analyzes major industrial events, annual achievements, and industrial strategies and development trends to serve as reference material for every sphere of industry.

This publication not only discusses domestic and international economic issues and key industrial topics, but also gives a forward and retrospective analysis of Taiwan’s top 15 industries, including an industrial overview of 2007 and forecast for 2008, analyses and discussions of major topics and issues to edify the readers on Taiwan’s industrial developments and international competitiveness.

====Contents====

Preface
Macroeconomic Overview
Chapter 1　 Outlook of Global Economics 1
Chapter 2　 Outlook of Taiwan's Economy 7
Chapter 3　 Major Developmental Issues of Taiwan's Manufacturing Sector 17
Industry Insights
Chapter 1　 IC Industry 31
Chapter 2　 Electronic Components Industry 39
Chapter 3　 Flat Panel Display (FPD) Industry 63
Chapter 4　 Electronic Material Industry 73
Chapter 5　 Communications Industry 85
Chapter 6　 IT Industry 93
Chapter 7　 Machinery Industry 135
Chapter 8　 Vehicle Industry 165
Chapter 9 Steel and Light Metals Industries 193
Chapter 10　Petrochemical Industry 231
Chapter 11　Textile Industry 267
Chapter 12　Biotechnology Industry 293
Chapter 13　Pharmaceutical Industry 315
Chapter 14　Medical Device Industry 337
Chapter 15　Food Industry 359
ITIS Program Outline
The Organization of ITIS


====Table====

Table 1-2-1 Expenditure on Gross Domestic Product of 2006 and 2007 7
Table 1-3-1 Taiwan’s Industrial Construction and Growth Contribution of GDP 2005-2006 18
Table 1-3-1 Taiwan’s Industrial Construction and Growth Contribution of GDP 2005-2006 (Continued) 19
Table 2-1-1 Taiwan’s IC Industry Output Value and Trend in Added Value 35
Table 2-2-1 Notebook PCs with LED Backlight 48
Table 2-2-2 Metal Raw Material Price Comparison 51
Table 2-2-3 2008 Global Electronic Component Market Demand Forecasting 59
Table 2-2-4 2008 Taiwan’s Electronic Component Industrial Output Forecasting 60
Table 2-3-1 Global Trend of FPD Output Value 2003-2008 64
Table 2-3-2 Global Trend in FPD Key Component Output Value 2003-2008 64
Table 2-3-3 Taiwan’s Trend in FPD Output Value 2003-2008 65
Table 2-3-4 Taiwan’s Trend in FPD Key Component Output Value 2003-2008 66
Table 2-3-5 Taiwan’s Large-sized TFT LCD FPD Industry Performance 67
Table 2-4-1 Global Electronic Material Market 74
Table 2-4-2 Taiwan’s Electronic Material Market 75
Table 2-4-3 Solar Photovoltaic Materials Industry Trends 77
Table 2-4-4 Capacity of TAC Film for LCD Polarizer 82
Table 2-4-5 Comparison of Two New Entry Competitors in TAC Business 83
Table 2-5-1 Annual Added Value of the Taiwanese Communications Equipment Industry 88
Table 2-6-1 Shipment Performance for Key Product Segments in the Taiwanese IT Hardware Industry in 2007 99
Table 2-6-2 Shipment Performance Forecasts for Key Segments within the Taiwanese IT Hardware Industry in 2008 110
Table 2-6-3 Taiwanese Information Software Industry Value 2005-2010 119
Table 2-6-4 Value of the Main Subsegments within the Taiwanese Computer Software Industry 2005-2010 120
Table 2-6-5 Taiwanese Computer Software Export Value 2005-2010 120
Table 2-6-6 The Export Value of the Main Subsegments within the Taiwanese Computer Software Industry 2005-2010 121
Table 2-6-7 The Export Value of the Taiwanese Embedded Software Industry 2005-2010 121
Table 2-6-8 Taiwanese Software Market Value 2005-2010 122
Table 2-7-1 Illustrates The Main Categories and Sub-categories of Ordinary Machines and The Products Included in Each of These Sub- categories 137
Table 2-7-1 Illustrates The Main Categories and Sub-categories of Ordinary Machines and The Products Included in Each of These Sub- categories (Continued) 138
Table 2-7-2 The Value Added Rates and Profit Rates of the Sub-categories of the machinery Industry in Taiwan in 2006 145
Table 2-7-3 The Export Values and Growths of the Sub-categories of the Machinery Industry in Taiwan 147
Table 2-8-1 Taiwan’s Vehicle Production Value 2002-2007 170
Table 2-8-2 Taiwan’s Vehicle Industry Value Added Analysis 2002-2007 171
Table 2-8-3 Existing Export Auto Makers and Would-be Export Auto Makers 174
Table 2-8-4 Export (Import) Trade Balance of Car Parts and Components 176
Table 2-8-5 Issues for Developing Intelligent Vehicles 179
Table 2-8-6 Production Volume of Kwang Yang and Sanyang 2002-2006 (Including KD Parts) 182
Table 2-8-6 Production Volume of Kwang Yang and Sanyang 2002-2006 (Including KD Parts)(Continued) 183
Table 2-8-7 Internal and External Key Factors Affecting the Development of Taiwan’s Automobile Industry 187
Table 2-8-8 Outline of Future Development 189
Table 2-9-1 Statistics of Apparent Global Steel Consumption 2006-2008 196
Table 2-9-2 Statistics of Annual Production Capacity for Taiwan’s Steel Refining Equipment in 2007 197
Table 2-9-3 Statistics of Various Steel Forms Production Capacity in 2007 198
Table 2-9-4 Statistics of Production Value, Import and Export Value and Added- Value for Taiwan’s Steel Industry 2003-2008 199
Table 2-9-5 Adjustment Measures of the Chinese Steel Industry 2004-2007 201
Table 2-9-6 Statistics of Chinese Import and Export Products and Import and Export Countries in 2006 202
Table 2-9-7 Taiwan’s Aluminum Industrial Chain and Representative Makers 211
Table 2-9-8 Market Demand and Supply Analysis of Aluminum Rolling Product in Taiwan 2003-2008 213
Table 2-9-9 Changes in Aluminum Import Volume in Taiwan 2002-2007 215
Table 2-9-10 Changes in Aluminum Ingot Export Volume in Taiwan 2002-2007 216
Table 2-9-11 Changes in Aluminum Export Volume in Taiwan 2002-2007 217
Table 2-9-12 Taiwan’s Magnesium Industrial Structure and Representative Makers 221
Table 2-9-13 Changes in Supply and Demand for Magnesium in Taiwan 222
Table 2-9-14 Taiwan’s Titanium Industrial Structure and Representative Makers 225
Table 2-10-1 Value added Analysis in Taiwan’s Petrochemical Industry 248
Table 2-10-2 Major Green Regulations from Developed Nations Impacting Taiwan’s Chemical Industry 250
Table 2-10-2 Major Green Regulations from Developed Nations Impacting Taiwan’s Chemical Industry (Continued) 251
Table 2-10-3 Chinese General Plastics Import Analysis 255
Table 2-10-4 The 4th phase Expansion Project List of Formosa’s No.6 Cracker 257
Table 2-10-5 2008 Petrochemical Price Forecasting 259
Table 2-10-6 Comparison of Export Competitiveness for PE and EG in China Market 261
Table 2-10-7 Top Ten Global Ethylene Producers in 2000 and 2007 262
Table 2-10-8 Taiwan’s Tariffs on Petrochemicals 262
Table 2-11-1 Output Value of Taiwan’s Textile Industry 271
Table 2-11-2 Textile Exports and Domestic Sales for Taiwan (Jan-Sep of 2006 & 2007) 271
Table 2-11-3 Value of Textile Inventories for Taiwan (Jan-Sep of 2006 & 2007) 271
Table 2-11-4 Number of Factories and Number of Employees in Taiwan’s Textile Industry 272
Table 2-11-5 Size of Taiwan’s Textile Industry Market 272
Table 2-11-6 Textile Trade Statistics for Taiwan (Jan-Sep, 2007) 273
Table 2-11-7 Month-by-Month Prices of Polyester Raw Material and Yarn 277
Table 2-11-8 US-Korean FTA Textile Product Tariff Reduction Model and Textile Product Percentages 282
Table 2-11-9 Tariff Rates for Type A Products 282
Table 2-11-10 Value of U.S. Textile Imports from Taiwan and South Korea in 2006 283
Table 2-11-11 Unit Prices of U.S. Textile Imports from Taiwan and South Korea 285
Table 2-11-12 Foreign Investment by the Textile Industry 288
Table 2-12-1 Global Biotechnology Industry at a Glace in 2006 294
Table 2-12-2 Top Ten Biotech Companies based on Global Revenue in 2006 295
Table 2-12-3 Top Ten Biotech Partnership/Licensing deals of 2006 and 2007 297
Table 2-12-3 Top Ten Biotech Partnership/Licensing deals of 2006 and 2007 (Continued) 298
Table 2-12-4 Top Ten Announced Biotech M&A of 2006 and 2007 299
Table 2-12-5 Top Ten Biopharmaceuticals Based on Global Sales in 2006 300
Table 2-12-6 Biopharmaceuticals Pipeline Developed by Taiwan Companies 303
Table 2-12-7 Biotech Companies Invested by the Development Fund 312
Table 2-13-1 Categories of Taiwan’s Pharmaceutical Industry 316
Table 2-13-2 Global Top Ten Prescription Drug Sales in 2006 318
Table 2-13-3 Global Top Ten Pharmaceutical Companies in 2006 320
Table 2-13-4 Taiwan’s Pharmaceutical Industry Production Output 2002-2008 322
Table 2-13-5 Taiwan’s Pharmaceutical Industry Added Value 2003-2008 323
Table 2-13-6 Statistics of Imports and Exports for Taiwan’s Pharmaceutical Industry 324
Table 2-13-7 Taiwan’s Top Twenty Blockbuster Drugs Rankings 325
Table 2-13-8 Taiwan’s Top 20 Pharmaceutical Companies by Sales 326
Table 2-13-9 Taiwan’s New Drug Technology Licensing Status 327
Table 2-14-1 Ability to Set Market Standards in the Medical Device Industry 343
Table 2-14-2 Level of Command of Key Technologies in the Medical Device Industry 346
Table 2-14-3 Level of Command of Key Components in the Medical Device Industry 347
Table 2-14-4 Level of Command of Key Materials in the Medical Device Industry 347
Table 2-14-5 Analysis of Taiwan’s Medical Device Industry Profile 2002-2006 349
Table 2-15-1 Production Value of Taiwan’s Food Industry 360


====Figure====

Figure 1-2-1 Average Earnings of Employees and the Growth Rates of Industry and Service Sector 9
Figure 1-2-2 Unemployment Rate 10
Figure 1-2-3 Consumer and Producer Price Indices 10
Figure 1-2-4 Fixed Capital Formation 11
Figure 1-2-5 Taiwan’s Trade Surplus 12
Figure 1-2-6 The NT Dollar Exchange Rate against the US Dollar in 2007 14
Figure 1-2-7 Overnight Interbank Call-Loan Rate in 2007 15
Figure 1-3-1 Taiwan’s Manufacturing Gross Output and Added Value 1991-2006 20
Figure 1-3-2 Construction of Taiwan’s Manufacturing Added Value 1991-2006 23
Figure 1-3-3 Number of Employees and Average Labor Compensation of Taiwan’s Manufacturing Industry 1991-2006 23
Figure 1-3-4 Component Ratio of Taiwan’s Manufacturing Added Value 1991-2006 24
Figure 1-3-5 Construction of Taiwan’s Manufacturing Value-added Rate 1991-2006 24
Figure 2-1-1 Global Semiconductor Sales, Production, and Average Price 33
Figure 2-1-2 B/B Ratio of North American Semiconductors 34
Figure 2-2-1 Scope of the Electronic Components Industry 39
Figure 2-2-2 Global Electronic Components Market Demand 2003-2008 43
Figure 2-2-3 Global Electronic Components Market Share (By Region) 2007 and 2011 44
Figure 2-2-4 Global Electronic Components Market Share (By Application) 2007 and 2011 44
Figure 2-2-5 Taiwan’s Electronic Components Output 2003-2008 45
Figure 2-2-6 Taiwan’s Electronic Components Output Added Value 2003-2007 46
Figure 2-2-7 Global 18650 Lithium Battery Supply 47
Figure 2-2-8 Declining Price of LCD-TV 49
Figure 2-2-9 LED Lighting Applications 50
Figure 2-2-10 PCB Manufacturing Gross Profit versus Copper Price 52
Figure 2-2-11 Korea 2020 non-ferrous Metal Technology Development Strategy 53
Figure 2-2-12 Taiwan’s Future Opportunities in Metal Material Development 54
Figure 2-2-13 Low-end PC and High-end Mobile Phone 55
Figure 2-2-14 Future Trend Analysis on Mobile Phone Market 55
Figure 2-2-15 Low-end PC Supply Chain in Taiwan 57
Figure 2-2-16 Humanization Trend of System Product Design for 2020 and 2030 58
Figure 2-3-1 Market Trend of Various Panel Display Products 2004-2008 69
Figure 2-3-2 Panel Industry Competing Country Positions in 2007 71
Figure 2-4-1 Material Change in Intel’s CPU 78
Figure 2-4-2 Supply-Demand Forecast on Poly-silicon for Solar Cell Manufacturing 79
Figure 2-5-1 Global Communications Equipment and Service Market Forecast 86
Figure 2-6-1 Taiwanese Notebook PC Shipment Volume 2003-2012 111
Figure 2-6-2 Taiwanese Desktop PC Shipment Volume 2003-2012 112
Figure 2-6-3 Taiwanese Motherboard Shipment Volume 2003-2012 113
Figure 2-6-4 Taiwanese Server Shipment Volume 2003-2012 114
Figure 2-6-5 Taiwanese LCD Monitor Shipment Volume 2003-2012 115
Figure 2-6-6 Taiwanese CRT Monitor Shipment Volume 2003-2012 115
Figure 2-6-7 Taiwanese Optical Disk Drive Shipment Volume 2003-2012 116
Figure 2-6-8 Taiwanese Digital Still Camera Shipment Volume 2003-2012 117
Figure 2-7-1 The Range of the Machinery Industry in this Study 136
Figure 2-7-2 A Pie Chart Illustrating Percentages of The Firms in the Machinery Industry in Terms of Turnover 140
Figure 2-7-3 A Bar Chart Illustrating the Output Values And Growth Rates of the Machinery Industry in Taiwan 1982-2007 141
Figure 2-7-4 The Output Values and the Average Annual Growths of the Sub-categories of the Machinery Industry in Taiwan in 2007 142
Figure 2-7-5 The Global Market of Machine Tools 1997-2006 149
Figure 2-7-6 The output Values of Machine tools Made in Taiwan, China, Japan and Korea 1997-2007 151
Figure 2-7-7 Several Big Groups have been Gradually Formed in the Machine Tool Industry in China 154
Figure 2-7-8 The National Policies and the Goal of the Enhancement in Production Scale in China 156
Figure 2-7-9 A Prediction Regarding the Output Values of the Machinery Industry of this Country in the Next Few Years 157
Figure 2-7-10 The Path to Enhance the Value Added for the Manufacturing Sector 161
Figure 2-7-11 The Monetary Values of the Machine Tools Exported to Two Types of Countries-advanced Countries and Developing/Emerging Countries 2000-2006 162
Figure 2-7-12 A Figure Schematically Illustrating the Big Growths in the Output Value of the Machine Tool Industry in Taiwan 164
Figure 2-8-1 Motorcycle Categorization 167
Figure 2-8-2 Technology Correlation 168
Figure 2-8-3 Sales of Domestic/Import Vehicles 172
Figure 2-8-4 Statistical Data of Taiwan’s Motorcycle Sales Quantity (Including KD Case) 181
Figure 2-8-5 Change of Basic Consumer Price Index (Oil expense) 184
Figure 2-8-6 Variation of Import Car Customs Tax/Market Share and Actual Exchange Rate Index 185
Figure 2-8-7 Taiwan and Global ATV Sales 190
Figure 2-9-1 Scope of the Steel Industry 193
Figure 2-9-2 Production and Apparent Consumption Statistics of Taiwan’s Crude Steel 1979-2008 199
Figure 2-9-3 Statistics of Chinese Crude Steel Production 1970-2009 200
Figure 2-9-4 Import and Export Trends of Major Waste Steel Trading Countries 205
Figure 2-9-5 Excess Global Crude Steel Capacity and the Trend of Steel Prices 208
Figure 2-9-6 Change of Import Volume for Aluminum Ingot in Taiwan 2002-2007 214
Figure 2-9-7 Changes in Production Value of Taiwanese Magnesium Products 2003-2008 222
Figure 2-9-8 Changes in Production Value of Taiwanese Titanium Alloy 2003-2008 226
Figure 2-9-9 Changes in Titanium Alloy Import Volume in Taiwan 1997-2007 227
Figure 2-10-1 Petrochemical Industrial Structure 232
Figure 2-10-2 The Outlook of Taiwan’s Ethylene Supply and Demand 233
Figure 2-10-3 The Outlook of Taiwan’s Propylene Supply and Demand 234
Figure 2-10-4 The Outlook of Taiwan’s Butadiene Supply and Demand 235
Figure 2-10-5 The Outlook of Taiwan’s Benzene Supply and Demand 236
Figure 2-10-6 The Outlook of Taiwan’s Toluene Supply and Demand 237
Figure 2-10-7 The Outlook of Taiwan’s Xylene Supply and Demand 237
Figure 2-10-8 The Outlook of Taiwan’s LDPE Supply and Demand 238
Figure 2-10-9 The Outlook of Taiwan’s HDPE Supply and Demand 239
Figure 2-10-10 The Outlook of Taiwan’s PP Supply and Demand 240
Figure 2-10-11 The Outlook of Taiwan’s PVC Supply and Demand 241
Figure 2-10-12 The Outlook of Taiwan’s PS Supply and Demand 242
Figure 2-10-13 The Outlook of Taiwan’s ABS Supply and Demand 242
Figure 2-10-14 The Outlook of Taiwan’s EG Supply and Demand 243
Figure 2-10-15 The Outlook of Taiwan’s PTA Supply and Demand 244
Figure 2-10-16 The Outlook of Taiwan’s CPL Supply and Demand 245
Figure 2-10-17 The Outlook of Taiwan’s VCM Supply and Demand 246
Figure 2-10-18 The Outlook of Taiwan’s SM Supply and Demand 247
Figure 2-10-19 The Outlook of Taiwan’s AN Supply and Demand 247
Figure 2-10-20 Crude Oil Price Trend Analysis 252
Figure 2-10-21 Ethylene Capacity Expansion in Mainland China 254
Figure 2-10-22 Middle East Ethylene Expansion 260
Figure 2-11-1 Value of Global Textile and Apparel Exports 267
Figure 2-11-2 Changes in Textile Exports from the World’s Ten Leading Export Areas 2005-2006 268
Figure 2-11-3 Changes in Apparel Exports from the World’s Ten Leading Export Areas 2005-2006 268
Figure 2-11-4 U.S. Textile and Apparel Imports From Various Countries/Areas in 2006 269
Figure 2-11-5 Breakdown of Synthetic Fiber Uses in 2006 279
Figure 2-11-6 A Brand Creation Model 280
Figure 2-11-7 REACH Registration Timetable 287
Figure 2-12-1 Total Equity Raised by Biotech Industry 1996-2007 296
Figure 2-12-2 Composition of Taiwan’s Biotech Companies 308
Figure 2-12-3 Taiwan’s Biotech Industrial Output 2003-2008 308
Figure 2-12-4 Output Distribution of Different Sectors in Taiwan’s Biotech Industry 309
Figure 2-12-5 Biotech/Pharmaceutical Industry Investments in Taiwan 311
Figure 2-13-1 Global Pharmaceutical Market 1999-2007 317
Figure 2-13-2 Taiwan’s Drug Market 1999-2006 321
Figure 2-13-3 Market Size for the Drugs with Patents expired between 2005-2009 330
Figure 2-14-1 Medical Device Industry Value Chain 338
Figure 2-14-2 Medical Device Industry Product Classification Connection Chart 341
Figure 2-14-3 Medical Device Market Worldwide 2004-2010 342
Figure 2-14-4 Analysis of the Competitiveness of Taiwan’s Medical Device Manufacturers 344
Figure 2-14-5 Comparison of Number of Medical Device Related Patents Worldwide 348
Figure 2-15-1 Taiwan’s Consumer Price Index of Perishable Foods of Dec.2005-Nov.2007 365
Figure 2-15-2 Taiwan’s Consumer Price Index of Processed Foods Dec.2005-Nov.2007 366