Mon, Dec 06, 2004 - Page 10 News List

Infighting threatens local IT sector, CEPD warns

CNA , TAIPEI

Internal strife, rather than a lack of brand names, is the largest threat to Taiwan's information technology sector, Hu Sheng-cheng (胡勝正), chairman of the Cabinet-level Council for Economic Planning and Development (CEPD), said yesterday.

Hu said that despite providing the world with over 50 percent of key components and devices, Taiwan's IT sector has failed to become a major player because of heated competition among domestic companies.

This competition has led to a price war that has only benefited foreign multinationals, Hu said, urging Taiwan computer makers to bolster cooperation to end this detrimental situation.

Asked about which industry will emerge as a new star in Taiwan', Hu predicted that the automobile industry has the potential to reach annual production of more than NT$1 trillion (US$30.5 billion) -- which would make it the fourth domestic industry after the semiconductor, flat-panel display and telecommunication sectors to do so.

Basing his analysis on the fact that Taiwan produces world-class car accessories, he claimed that there is ample room for the local automobile industry to further develop in conjunction with the country's car electronics makers thanks to Taiwan's advanced opto-electronics and display industries.

He stressed that training skilled workers and professionals is extremely important for industry and also for the government in its bid to build Taiwan into a business operations center and a financial hub in the Asia-Pacific region.

The government also plans to cut the number of state-run financial institutions in Taiwan by half in an effort to reduce overlap and sharpen the industry's competitiveness.

Citing Directorate General of Budgets, Accounting and Statistics figures, Hu said that meeting the government's forecast of economic growth of 5 percent and unemployment of 4 percent for next year will be a challenge amid a slowing world economy.

To achieve the two targets, the government will keenly promote local demand.

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