Semiconductor industry in Taiwan

In 2025 the [[Merck Group]] opened a major semiconductor components and supplies production facility in Kaohsiung.{{cite web |last1=Wang |first1=Lisa |title=Merck opens major Kaohsiung chip fab |url=https://www.taipeitimes.com/News/biz/archives/2025/12/02/2003848150 |website=taipeitimes.com |publisher=Taipei Times |access-date=1 December 2025}}

In 2025 the [[Merck Group]] opened a major semiconductor components and supplies production facility in Kaohsiung.{{cite web |last1=Wang |first1=Lisa |title=Merck opens major Kaohsiung chip fab |url=https://www.taipeitimes.com/News/biz/archives/2025/12/02/2003848150 |website=taipeitimes.com |publisher=Taipei Times |access-date=1 December 2025}}

==Challenges Facing Industry Development==

==Challenges facing industry development==

===Cyber Espionage and Cybersecurity Threats===

===Cyber espionage and cybersecurity threats===

The Taiwanese semiconductor industry has become a primary target of [[Chinese intelligence activity abroad|Chinese intelligence operations]] due to its global strategic importance. Chinese state-sponsored actors have engaged in cyber espionage campaigns aimed at acquiring proprietary Taiwanese semiconductor technologies and undermining supply chain resilience. For example, a 2024 report by cybersecurity firm FireEye identified a surge in activity by the Chinese-affiliated threat group APT41, which targeted Taiwan's semiconductor research institutions through spear-phishing emails and the deployment of custom [[malware]] tools such as Cobalt Strike and PlugX.{{Cite web |date=2024-08-01 |title=Taiwanese Research Center Targeted by APT41 |url=https://duo.com/decipher/taiwanese-research-center-targeted-by-apt41 |access-date=2025-04-21 |website=Decipher |language=en}}

The Taiwanese semiconductor industry has become a primary target of [[Chinese intelligence activity abroad|Chinese intelligence operations]] due to its global strategic importance. Chinese state-sponsored actors have engaged in cyber espionage campaigns aimed at acquiring proprietary Taiwanese semiconductor technologies and undermining supply chain resilience. For example, a 2024 report by cybersecurity firm FireEye identified a surge in activity by the Chinese-affiliated threat group APT41, which targeted Taiwan's semiconductor research institutions through spear-phishing emails and the deployment of custom [[malware]] tools such as Cobalt Strike and PlugX.{{Cite web |date=2024-08-01 |title=Taiwanese Research Center Targeted by APT41 |url=https://duo.com/decipher/taiwanese-research-center-targeted-by-apt41 |access-date=2025-04-21 |website=Decipher |language=en}}

To counteract these threats, Taiwan has passed amendments to its National Security Act, tightening restrictions on foreign investment in key technologies and enhancing legal penalties for unauthorized technology transfers.{{Cite web |last=Hale |first=Erin |title=Taiwan cracks down on China poaching tech talent |url=https://www.aljazeera.com/economy/2022/5/4/taiwan-is-trying-to-thwart-chinas-efforts-to-poach-tech-talent |access-date=2025-04-21 |website=Al Jazeera |language=en}} Taiwan has also established partnerships with international cybersecurity firms and government agencies, including the U.S. Cybersecurity and Infrastructure Security Agency (CISA) and Japan's National Center of Incident Readiness and Strategy for Cybersecurity (NISC), to coordinate on intelligence sharing and best practices.{{Cite web |last=Ratiu |first=Andrea |date=2024-07-02 |title=Strengthening Taiwan's resiliency |url=https://www.atlanticcouncil.org/in-depth-research-reports/report/strengthening-taiwans-resiliency/ |access-date=2025-04-21 |website=Atlantic Council |language=en-US}} In parallel, the Taiwanese government has funded public-private cybersecurity initiatives and expanded educational outreach programs focused on cyber hygiene for businesses and academic institutions.{{Cite web |last=Institute |first=Global Taiwan |date=2024-03-20 |title=The Nexus of Cybersecurity and National Security: Taiwan's Imperatives Amidst Escalating Cyber Threats |url=https://globaltaiwan.org/2024/03/the-nexus-of-cybersecurity-and-national-security-taiwans-imperatives-amidst-escalating-cyber-threats/ |access-date=2025-04-21 |website=Global Taiwan Institute |language=en-US}}

To counteract these threats, Taiwan has passed amendments to its National Security Act, tightening restrictions on foreign investment in key technologies and enhancing legal penalties for unauthorized technology transfers.{{Cite web |last=Hale |first=Erin |title=Taiwan cracks down on China poaching tech talent |url=https://www.aljazeera.com/economy/2022/5/4/taiwan-is-trying-to-thwart-chinas-efforts-to-poach-tech-talent |access-date=2025-04-21 |website=Al Jazeera |language=en}} Taiwan has also established partnerships with international cybersecurity firms and government agencies, including the U.S. Cybersecurity and Infrastructure Security Agency (CISA) and Japan's National Center of Incident Readiness and Strategy for Cybersecurity (NISC), to coordinate on intelligence sharing and best practices.{{Cite web |last=Ratiu |first=Andrea |date=2024-07-02 |title=Strengthening Taiwan's resiliency |url=https://www.atlanticcouncil.org/in-depth-research-reports/report/strengthening-taiwans-resiliency/ |access-date=2025-04-21 |website=Atlantic Council |language=en-US}} In parallel, the Taiwanese government has funded public-private cybersecurity initiatives and expanded educational outreach programs focused on cyber hygiene for businesses and academic institutions.{{Cite web |last=Institute |first=Global Taiwan |date=2024-03-20 |title=The Nexus of Cybersecurity and National Security: Taiwan's Imperatives Amidst Escalating Cyber Threats |url=https://globaltaiwan.org/2024/03/the-nexus-of-cybersecurity-and-national-security-taiwans-imperatives-amidst-escalating-cyber-threats/ |access-date=2025-04-21 |website=Global Taiwan Institute |language=en-US}}

===Talent Poaching and Industrial Policy===

===Talent poaching and industrial policy===

Beyond cyber intrusion, Chinese efforts to access Taiwan's semiconductor expertise include talent recruitment campaigns. According to a 2024 analysis by the Taiwanese think tank [[Institute for National Defense and Security Research]] (INDSR), Chinese firms have offered engineers up to three times their local salaries, along with relocation packages and incentives, to join mainland companies.{{Cite web |title=國防安全研究院-出錯了 |url=https://indsr.org.tw/Error?aspxerrorpath=/en/index |access-date=2025-04-21 |website=indsr.org.tw}} These campaigns often operate through shell companies or overseas research collaborations, complicating enforcement efforts.{{Citation needed|date=July 2025}}

Beyond cyber intrusion, Chinese efforts to access Taiwan's semiconductor expertise include talent recruitment campaigns. According to a 2024 analysis by the Taiwanese think tank [[Institute for National Defense and Security Research]] (INDSR), Chinese firms have offered engineers up to three times their local salaries, along with relocation packages and incentives, to join mainland companies.{{Cite web |title=國防安全研究院-出錯了 |url=https://indsr.org.tw/Error?aspxerrorpath=/en/index |access-date=2025-04-21 |website=indsr.org.tw}} These campaigns often operate through shell companies or overseas research collaborations, complicating enforcement efforts.{{Citation needed|date=July 2025}}

Beijing has denied allegations of state-directed theft and framed its industrial development as part of its [[Made in China 2025]] strategy.{{Cite web |last=Kennedy |first=Scott |date=June 1, 2015 |title=Made in China 2025 |url=https://www.csis.org/analysis/made-china-2025 |website=CSIS: Center for Strategic & International Studies}}

Beijing has denied allegations of state-directed theft and framed its industrial development as part of its [[Made in China 2025]] strategy.{{Cite web |last=Kennedy |first=Scott |date=June 1, 2015 |title=Made in China 2025 |url=https://www.csis.org/analysis/made-china-2025 |website=CSIS: Center for Strategic & International Studies}}

===Taiwanese Policy and Regional Cooperation===

===Taiwanese policy and regional cooperation===

Taiwan's response to these multifaceted challenges includes policy innovation and regional engagement. In addition to cybersecurity reforms, the Taiwanese government has pursued greater alignment with allies through the U.S.-Taiwan Tech Trade and Investment Framework and trilateral dialogues with Japan and South Korea focused on semiconductor supply chain resilience.{{Cite web |date=2023-09-21 |title=Taiwan, US to expand cybersecurity agreement – Taipei Times |url=https://www.taipeitimes.com/News/biz/archives/2023/09/21/2003806535?utm_source=chatgpt.com |access-date=2025-04-21 |website=www.taipeitimes.com}}{{AI-retrieved source|date=March 2026|checked=no}}

Taiwan's response to these multifaceted challenges includes policy innovation and regional engagement. In addition to cybersecurity reforms, the Taiwanese government has pursued greater alignment with allies through the U.S.-Taiwan Tech Trade and Investment Framework and trilateral dialogues with Japan and South Korea focused on semiconductor supply chain resilience.{{Cite web |date=2023-09-21 |title=Taiwan, US to expand cybersecurity agreement – Taipei Times |url=https://www.taipeitimes.com/News/biz/archives/2023/09/21/2003806535?utm_source=chatgpt.com |access-date=2025-04-21 |website=www.taipeitimes.com}}{{AI-retrieved source|date=March 2026|checked=no}}