The nation's information software-service sector outperformed the information hardware-manufacturing sector in financial feasibility, profitability and debt-repaying capabilities last year, according to a report conducted by the China Credit Information Service Ltd (
The information software-service sector includes online-game programming, integrated circuit (IC) design, Internet facilities, electronic components retailers and other computer programming industries.
The report, which looked into the financial performance of 2,600 domestic high-tech companies last year, also found that the semiconductor, information storage and optical disk, print circuit board, optoelectronic material and optoelectronic product and components industries were the top five least financially feasible industries.
"Taiwan should put more emphasis on the development of profit-making software industries than capital-intensive hardware manufacturing industries, whose profit margins greatly narrowed [last year]," Jill Shen (沈文禎), marketing manager of China Credit, said at a press conference yesterday.
In the rating company's annual report, the online-game programming industry was the most financially viable last year, posting a 30 percent net profit margin while the worst-performing industry, semiconductor manufacturing, experienced a recession, achieving a negative 4 percent net profit margin, Shen said.
The nation's IC-design industry, which ranked the second most financially feasible, played a particularly vital role for the nation's economy, as five Taiwanese IC-design companies ranked among the sector's top 20 most important firms worldwide, taking one fourth of the world's value of output, Shen said.
However, the nation's two industrial pillars -- the semiconductor and optoelectronic industries -- were not as profitable as expected. But the world's two largest chipmakers, Taiwan Semiconductor Manufacturing Co (
Commenting on the agency's report, Joseph Yeh (
He also said the report was biased, as the semiconductor industry's poor financial performance last year was a result of the cyclic economic recession and structural weaknesses in the financial system.
Chen Yen-pao (
To maintain sustainable growth, the government should therefore allow the semiconductor industry to branch out into China to build up its profitability and competitiveness by taking advantage of cheap labor and land, said Hsu Chen-ming (許振明), an economics professor at National Taiwan University.
"Cross-strait economic and industrial integration is an inevitable trend," Hsu said, saying cross-strait direct links by air and sea should be opened up.
All three economists, nevertheless, agreed with the rating company's suggestion of turning Taiwan into a high-tech service-oriented country.
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