The Rundown: FDI Drops, Export Orders Rise, and Intel Steps up Competition with TSMC

A weekly snapshot of Taiwan business news stories brought to you by CommonWealth and AmCham Taiwan’s TOPICS

Inbound FDI Drops by Over 18% in 2021

The Investment Commission announced on January 20 that it approved 2,711 foreign direct investment (FDI) applications in 2021, a 20.68% decrease from the year before. FDI last year totaled US$7.48 billion, an 18.24% year-on-year decrease.

The five sectors that received the most overseas investment included financial services and insurance, wholesale and retail trade, real estate, information and communication technologies (ICT), and electronic parts and components manufacturing. Of these, investment in real estate increased by 38.03%, while ICT investment increased by 72.08%.

Meanwhile, Chinese investment in Taiwan has continued to decrease. Last year, only 49 investment applications from China were approved, a 45.56% decrease from the previous year. Chinese investment in 2021 totaled US$116.24 million, a 7.97% decrease compared to 2020.

Export orders Reach New Record

The Ministry of Economic Affairs (MOEA) announced in January that export orders for the month of December reached US$67.9 billion, a 12.1% increase from the previous year and a new monthly record. Annual export orders totaled US$674.13 billion, the best year on record. Two major product categories, electronics and information communication goods, comprised nearly 60% of the orders.  

An analysis conducted by the MOEA’s Department of Statistics found that the continually increasing demand for digital transformation and the implementation of new technologies has resulted in a boom in orders for related products. For example, December orders for electronics products totaled US$21.65 billion, a 12.2% increase from the previous year. This constitutes not only a record high, but also represents 23 consecutive months of double-digit growth. Total annual electronics orders reached a new record of US$207.4 billion, the first time annual export orders have exceeded US$200 billion.

In terms of the major regions placing orders, the largest amount – US$200.1 billion – came from the U.S. Orders from China (inc. Hong Kong) totaled US$175.05 billion, the second highest, followed by Europe with the third highest amount of US$134.63 billion.

Intel and TSMC Compete for Semiconductor Supremacy

Intel confirmed on January 21 that it will invest an estimated US$20 billion to construct the world’s largest chip factory on 1,000 acres of land in New Albany, Ohio.

The company has also ordered the industry’s first TWINSCAN EXE:5200 system from the Dutch company ASML. This mass production system is equipped with High-NA extreme ultra-violet (EUV) technology and the ability to produce more than 200 wafers per hour.

Intel’s competition with TSMC is not only over technology, but also talent. Intel is targeting seven of Taiwan’s leading semiconductor companies for talent poaching by offering a maximum referral bonus of NT$240,000 NTD (US$8,660), nearly 50% higher than past referral bonuses of US$160,000 (US$5,770).

This edition was translated from the original Chinese by AmCham Taiwan.