Taiwanese lawmakers have passed new rules that let local chip firms turn 25% of their annual research and development expenses into tax credits, to keep cutting-edge semiconductor technologies at home and maintain its technology leadership. Officials have repeatedly said they will ensure the latest chip technologies remain in Taiwan.
Taiwan’s Ministry of Economic Affairs said, “As the United States, Japan, South Korea and the European Union are all offering massive incentives to build domestic supply chains, Taiwan should bolster the global competitiveness of its key industries. The new rules will help encourage Taiwanese companies to keep their roots here.”
The ministry added that the new incentives should take effect sometime from 2023. Chip companies in Taiwan can also claim tax credits on 5% of the annual costs of buying new equipment for advanced process technologies. Any credits earned, however, cannot exceed 50% of the total annual income taxes a firm owes.
Various governments have been offering incentives for domestic chip production, in hopes of reducing a heavy reliance on Taiwan for advanced semiconductors and avoiding future supply disruptions. To mitigate those concerns, TSMC is building new facilities in Japan and the US, and is considering an additional site in Germany.
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