Government's policy attracts Taiwanese firms back home

The trade war between China and the US has pushed Taiwan’s tech and manufacturing companies to rethink their supply chain strategies which used to rely heavily on China. Taiwan’s tech industry saw a large wave of offshoring to China from 2000, especially the electronic component and computer sectors, resulting in four of China’s top 10 companies exporting to the US originating from Taiwan, including Foxconn, Quanta, Pegatron, and Compal Electronics. As the trade war tensions hsve escalated, Taiwanese companies are considering relocating production lines to Southeast Asia and Taiwan in order to diversify their manufacturing base. 

At the same time, the Taiwan government has been rolling out a series of policies and incentives to encourage companies to move back, such as the “Action Plan for Welcoming Overseas Taiwanese Businesses to Return to Invest in Taiwan”. Until November 2020, 205 companies had committed to investing a total of NT$789 billion in plant construction, the development of manufacturing facilities, R&D and land acquisitions. In general, 5% to 10% of the total amount committed could be allocated for factory acquisitions and boost demand for industrial land as well as factories. Companies especially prefer industrial parks and technology parks in northern Taiwan which offer comprehensive utilities and infrastructure. Taoyuan City is the first priority area for reshoring companies given easy access to the international airport, manufacturing cluster benefits and a location close to downtown which helps with recruitment.