Taiwan Business in Brief – December 2019

Offshore Wind Enters Commercial Stage

President Tsai Ing-wen attended the inauguration of Taiwan’s first commercial-scale offshore wind farm, Formosa 1, on November 12 in a ceremony at the Longfeng Fishing Harbor in Miaoli. Located between two and six kilometers off the coast of Miaoli, the NT$18.7 billion (over US$623 million), 128-megawatt (MW) project is designed to generate 53.9 million kilowatt-hours annually, enough to power 128,000 households.

The initial stage of Formosa 1, which has been generating power since 2017, consisted of two 4-MW turbines. Construction of Phase 2 was completed this October and consists of twenty 6-MW turbines. 

The project is a joint venture between Danish power utility and global wind power developer Ørsted A/S (35% ownership), Japanese power utility JERA (32.5%), Australian investment firm Macquarie’s Green Investment Group (25%), and local manufacturing firm Swancor (7.5%). It is the first of Taiwan’s planned 5.6 gigawatts (GW) of offshore wind capacity to be completed by 2025.

At the ceremony, Tsai said that Formosa 1 reflects the determination of Taiwan’s local and foreign players to develop the local offshore wind power sector. She also announced plans for development of a further 10GW of offshore wind capacity between 2026 and 2035. 

SuperMicro, Innolux Investments Approved

Two firms taking advantage of recent government incentive programs have been approved to invest large amounts in Taiwan.

Taiwanese flat-panel maker Innolux Corp. applied to invest NT$70 billion (US$2.29 billion) as part of a government program designed to encourage the return of Taiwanese businesses from China. It is the largest proposed investment among the more than 150 applications submitted since the program started earlier this year. The company’s plan to build a “zero touch” facility in Taiwan is explained in further detail in the Backgrounder section of this issue.

San Jose, California-based ICT company SuperMicro was approved to invest NT$10 billion (US$328 million) to establish an R&D center for advanced servers, as well as to expand its logistics center and launch automated assembly lines. The U.S. company’s application was submitted through a separate government program designed to attract foreign investment.

Employment Status Guidelines Issued

The Ministry of Labor on November 19 issued a set of non-legally-binding guidelines for businesses aimed at clarifying the designation of workers as employees or contractors. The new guidelines define these terms based on the level of a worker’s subordination in the company. Factors include whether the individual can choose when to work, can refuse assignments or shifts, and are held responsible for violations of company policy. Other determinants include the level of workers’ involvement in the company, and whether they must cooperate with others in the company in order to complete assignments or tasks.

The MOL’s guidelines come on the heels of a series of severe incidents involving food delivery drivers who were uninsured due to being classified by the company as contractors, rather than employees. Under Taiwan’s labor laws, employees are guaranteed health and labor insurance, which cover injury and death on the job.