Mon, Nov 08, 2004 - Page 1 News List

Government may tighten review of R&D centers

By Amber Chung  /  STAFF REPORTER

The government may tighten its review of foreign companies' applications for setting up research and development (R&D) centers in Taiwan, amid increasing criticism that some multinationals disguised their international purchasing offices here as R&D centers, a government official said yesterday.

"We would be more prudent in the review process," Minister of Economic Affairs Ho Mei-yueh (何美玥) said in a press conference for the 2004 Taiwan Business Alliance Forum yesterday.

The three-day event will formally kick off today at the Taipei International Convention Center. More than 500 local and foreign guests have signed up for this year's event, which is set to provide a dialogue platform for local and foreign companies in the domains of three targeted industries: Integrated chip (IC) design, information technology services and biotechnology.

Ho made the remark after critics like Huang An-chieh (黃安捷), chairman of Accton Co, said last week that some foreign companies have taken advantage of government subsidies to set up R&D centers in Taiwan, while developing similar products as local firms.

Accton is located in the Hsinchu Science Industrial Park, and manufactures local-area network equipment and ethernet products. Huang urged the government to revamp its R&D center incentive programs.

In a bid to downplay the flak, Ho said the ministry has not seen many foreign R&D centers in Taiwan develop similar products as local companies, while stressing the significance of the international purchasing offices, which contribute US$40 billion per year to the nation's economy.

"With expectations of sustainable purchasing ... we think [the purchasing offices] should be integrated with R&D centers, which encourage development and production of new, futuristic products in Taiwan," Ho said.

Last year, the government held its first-ever Taiwan Business Alliance Conference, eliciting a total of NT$138.3 billion worth of investment, according to the ministry.

Foreign investment in Taiwan totaled US$2.5 billion in the first nine months of this year, up 18.31 percent year-on-year, the ministry said. At present, 21 foreign companies including Hewlett-Packard, Microsoft, IBM and Sony have set up 24 R&D centers in Taiwan. One of the latest is the Mountain View, California-based Synopsys Inc, which announced in September a NT$800 million R&D center, aimed at supporting and providing electronics-design automation software for chip design.

Taiwan's IC designers are expected to create US$7.9 billion in revenue this year, up 42 percent from last year, said Robbins Yeh (葉瑞斌), general manager of Synopsys Taiwan Ltd, who was a guest speaker at the press conference.

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