weighted score 6.5 · ten dimensions
Sourcing Attractiveness Index · ten dimensions
Taiwan
Labour cost, supply base depth, logistics infrastructure, trade access, and innovation scores for Taiwan as a sourcing destination.
Labour cost competitiveness
3
Manufacturing wages are high relative to Southeast Asian alternatives. Semiconductor fabrication labour costs are globally competitive for the technology tier but not cost-advantaged in absolute terms.
Supply base depth
8
Semiconductor supply chain is the deepest and most advanced globally. IC design, fabrication, packaging, and testing all co-located. Outside semiconductors, supply base is narrower than mainland China.
Logistics & infrastructure
8
Kaohsiung and Keelung ports are efficient. Taoyuan International Airport is a major Asia-Pacific cargo hub. Domestic infrastructure is modern and well-maintained.
Workforce skills
9
World-class engineering talent in semiconductor design and fabrication. Strong university pipeline (NTHU, NCTU, NTU). MediaTek and TSMC attract top regional talent.
Scalability
3
Small island economy with 24 million population. Physical capacity constraints and geopolitical risk limit scalability for new entrants. TSMC's Arizona and Kumamoto fabs reflect capacity diversification pressure.
Ease of doing business
7
Transparent regulatory framework, strong IP protection, independent judiciary. Foreign investment is welcomed in most sectors. Regulatory complexity is low relative to mainland China.
Trade access & tariffs
9
No comprehensive FTA with EU or US, but ITA zero-duty access covers semiconductors and electronic components — Taiwan's dominant exports. ECFA with mainland China provides limited preferential access.
Sustainability baseline
6
RE100 commitments from TSMC and major manufacturers are driving renewable energy investment. Coal and gas still dominate the energy mix. Carbon neutrality target set for 2050.
Innovation & IP
3
Among the highest R&D-to-GDP ratios globally (~3.6%). Strong patent portfolio in semiconductors. IP protection is robust with enforceable courts. Innovation is deep but narrowly concentrated in electronics.
Quality standards
9
Semiconductor fabrication operates to the highest global quality standards. Automotive-grade chip certification (AEC-Q100) well-established. ISO and IATF certification widespread in electronics supply chains.
Semiconductor & Technology Leadership
Semiconductor & Technology Leadership
- TSMC dominance
- TSMC produces approximately 90% of the world's most advanced semiconductors (sub-7nm). Apple, NVIDIA, AMD, and Qualcomm all depend on TSMC fabrication. No comparable alternative capacity exists outside Taiwan for leading-edge nodes.
- R&D intensity
- Taiwan's gross domestic R&D expenditure is approximately 3.6% of GDP — among the highest globally. MediaTek, the world's largest fabless chipmaker by unit volume, is headquartered in Hsinchu. IC design ecosystem is deep and globally competitive.
- Supply chain depth
- Hsinchu Science Park and Southern Taiwan Science Park host hundreds of semiconductor equipment, materials, and packaging companies. Full upstream-to-downstream chip supply chain operates within a compact geographic corridor.
Trade Access & Workforce
Trade Access & Workforce
- FTA limitations
- Taiwan has no FTA with the EU or the US due to diplomatic isolation. However, the WTO Information Technology Agreement (ITA) provides zero-duty access for semiconductors and most electronic components — effectively neutralising tariff barriers for Taiwan's dominant export categories.
- Workforce & demographics
- Population of approximately 24 million with an aging demographic profile. Engineering talent pool is strong but labour supply is tightening. Working-age population is projected to decline, increasing competition for skilled workers.
- Ease of doing business
- Strong rule of law, transparent regulatory environment, and well-established IP protection. English proficiency in technology sectors is high. Business environment is significantly more accessible to foreign buyers than mainland China.