The BGA Taiwan Team, led by Senior Adviser Rupert Hammond-Chambers, wrote an update to clients on Taiwan’s 2024 fall Legislative Yuan session.

Context

  • This is the second update in a series on Taiwan’s 2024 autumn Legislative Yuan session (first update available here), in which BGA examines Taiwan’s environmental policy as it relates to its energy and energy policy.
  • Taiwan’s technology budget for 2025 totals TWD 146.6 billion ($4.6 billion), marking a 14.9 percent increase from 2024, or around TWD 19 billion ($593 million) more. Key investments include TWD 14.6 billion ($455 million) for the semiconductor industry, TWD 10.1 billion ($315 million) for net-zero technologies, TWD 9.4 billion ($293 million) for artificial intelligence (AI), TWD 6 billion ($187 million) for space and communications technologies and TWD 5.3 billion ($165 million) for digital and humanities projects.

Significance

  • The 2025 technology budget focuses on promoting net-zero technologies and the “Five Trustworthy Industries,” a new policy direction introduced by President Lai Ching-te aimed at boosting Taiwan’s global competitiveness. The government has allocated TWD 210 billion ($6.6 billion) to support the development of the semiconductor, AI, defense, security and surveillance and next-generation communications industries.
  • Another significant focus of the 2025 budget is investment in southern Taiwan, particularly through the “Southern Taiwan Smart Technology Industry Ecosystem Plan,” with a total budget of TWD 31.4 billion ($1.1 billion). The funds will be directed toward smart technology and AI industrial zones in Shalun, Tainan and Kaohsiung, promoting southern Taiwan as a core hub for tech innovation and helping balance the distribution of technology resources across the country.

Implications

  • The Ministry of Economic Affairs held its second electricity rate review meeting of the year September 30 and decided to increase the average industrial electricity price by 12.5 percent. For industries with declining electricity demand or production value, the increase was reduced to 7 percent or frozen. Residential and small business electricity users, which account for 95.2 percent of all electricity accounts, will not experience any rate changes.
  • In the coming months, decisions made in the Legislative Yuan on additional subsidy to Taipower will become a focal point. If the Legislative Yuan does not approve, electricity rates may be adjusted again in April 2025, affecting both industrial and residential users and increasing consumer expenses. Therefore, it will be crucial to watch whether the Lai administration adjusts its energy policies and stabilizes Taipower’s finances in the near future.

We will continue to keep you updated on developments in Taiwan as they occur. If you have any comments or questions, please contact BGA Taiwan Senior Adviser Rupert Hammond-Chambers at rupertjhc@bowergroupasia.com.

Best regards,

BGA Taiwan Team

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Senior Advisor

Rupert is an expert on Taiwanese political and economic issues and additionally brings a special focus on defense and security within BGA. Rupert concurrently leads the U.S.-Taiwan Business Council, where he was elected vice president in 1998 and president in 2000. Prior to 1994, he served as an associate for development at the Center for Security Policy, a defense and foreign policy think tank in Washington, D.C. Rupert is a member of the board of The Project 2049 Institute. He is also a trustee of Fettes College and is a member of the National Committee on United States-China Relations. Rupert ... Read More