The Taiwanese version of the "Chip Act" is committed to keeping cutting-edge technology in Taiwan, China

On January 9, local time, according to Bloomberg News, Chinese Taiwan legislators have passed new regulations that allow local chip companies to convert 25% of their annual research and development expenses into tax credits. This is to keep cutting-edge semiconductor technology in the One of the efforts made by Taiwan, China and to maintain a leading position in technology.

Local officials have repeatedly said they will ensure the latest chip technology stays in Taiwan, a point reiterated by executives from TSMC and other local chip giants, the report said. In the past, Taiwan, China has helped local chipmakers through infrastructure development and other measures, and now it is stepping up its efforts.

Shares of TSMC and UMC rose more than 4 percent in Taipei on Monday, the first trading day after the new rules were announced.

"Since the United States, Japan, South Korea, and the European Union are all offering substantial incentives to establish domestic supply chains, Taiwan should strengthen the global competitiveness of key industries," Taiwan's authorities said in a statement on Saturday. "The new rules will Helps encourage local companies to take root here."

The report pointed out that governments from the United States to South Korea have been providing incentives for domestic chip production, hoping to reduce their heavy dependence on Taiwan's advanced semiconductors and avoid future supply disruptions.

To allay those concerns, TSMC is building new factories in Japan and the U.S., and is considering building another in Germany.

The new incentives should come into effect sometime in 2023. The Taiwan version of the "Chip Act" also stipulates that chip companies in Taiwan, China can also apply for tax credits for 5% of the annual cost of purchasing new equipment with advanced process technology. However, any credit received may not exceed 50% of the total annual tax liability of the company.

Currently, equipment purchases are the biggest cost of building a new chip factory. For example, ASML's extreme ultraviolet (EUV) lithography machines now cost close to $200 million each.