Artificial intelligence industry in Taiwan

The artificial intelligence (AI) industry in Taiwan refers to the development, application, and commercialization of artificial intelligence technologies within Taiwan. The industry has grown alongside Taiwan's established strengths in semiconductor manufacturing and information and communications technology (ICT), and is supported by government policy, research institutions, and private sector participation. AI development in Taiwan has focused on integrating hardware capabilities with software applications across sectors such as manufacturing, healthcare, and smart infrastructure.^[2]

Artificial intelligence has been identified as a strategic area of development in Taiwan since the late 2010s. While Taiwan has historically played a limited role in early theoretical and expert-system phases of AI development, its position in global electronics manufacturing has provided a foundation for participation in the contemporary era of machine learning and data-driven AI systems.^[3]

Taiwan's AI industry is characterized by a strong hardware base, particularly in semiconductor production and AI server manufacturing, combined with increasing investment in software, data infrastructure, and applied AI services. The sector has been shaped by global demand for computing power, advances in deep learning, and the expansion of AI applications in industrial and commercial contexts.^[4]

The Taiwanese government has promoted AI development through a series of national strategies. In 2017, the Ministry of Science and Technology launched the "AI Grand Strategy for a Small Country" initiative, investing approximately US$517 million between 2017 and 2021 to support research, infrastructure, and talent development. This initiative aimed to build a domestic AI ecosystem by funding research centers, expanding data infrastructure, and supporting industrial adoption.^[5]

The Executive Yuan also introduced the AI Taiwan Action Plan 1.0 (2018–2021), which focused on integrating AI technologies into existing industries and strengthening research and development capabilities.^[3] A subsequent plan, AI Taiwan Action Plan 2.0 (2023–2026), expanded the focus to include ethical governance, regulatory frameworks, and risk management in response to the growth of generative AI technologies.^[6]

In 2023, the Taiwan AI Center of Excellence (Taiwan AICoE), a government-backed hub, was established by the National Science and Technology Council to accelerate AI development, foster international collaboration, and train talent in Taiwan. It acts as a specialized think tank focusing on creating a "smart technology island" by integrating AI resources and developing trusted, human-centric AI technologies.^[7]

In 2024, the Taiwan Chip-based Industrial Innovation Program (CbI) was launched by the Executive Yuan as a 10-year, NT$300 billion (US$9.3 billion) initiative to leverage Taiwan's semiconductor dominance, driving innovation in AI, smart mobility, manufacturing, and healthcare. It aims to combine generative AI with IC technology, cultivate talent, and attract global startups to build a "Silicon Island".^[8]

In parallel, the Taiwanese government has explored legislative frameworks such as a proposed Artificial Intelligence Fundamental Act in December 2025, addressing issues including data protection, safety standards, and intellectual property.^[9]

Industrial structure

Semiconductor and hardware foundation

Taiwan's AI industry is closely linked to its semiconductor sector. In 2020, Taiwan accounted for approximately 77.3% of the global wafer foundry market and 57.7% of packaging and testing, with a 20.1% share in integrated circuit (IC) design. These capabilities provide critical infrastructure for AI systems, which rely on high-performance computing hardware.^[10]

Taiwanese firms are also involved in the production of AI servers and related components, contributing significantly to global supply chains for data centers and cloud computing. The integration of chip design, manufacturing, and assembly has enabled Taiwan to play a central role in providing the computational resources required for AI development.^[11]

On 20 November 2025, Google established the "Google Taiwan AI Infrastructure R&D Center", second only to its US headquarters and largest AI hardware infrastructure engineering center outside of the United States.^[12]^[13]^[14]

Software and services

Compared to its hardware capabilities, Taiwan's AI software sector is less developed. The absence of large-scale global AI platform companies has been noted as a structural limitation. As a result, much of Taiwan's AI industry focuses on applied solutions, including customization of existing AI models for specific industries. Therefore, efforts to strengthen software capabilities have included investment in research institutions, startup ecosystems, and collaborations between academia and industry.^[15]

Applications

Smart manufacturing

AI has been widely applied in Taiwan's manufacturing sector, which is a major component of the economy. Applications include process automation, predictive maintenance, quality control, and fault detection. AI-enabled smart manufacturing systems aim to improve efficiency, reduce production costs, and enhance product quality. Taiwan's manufacturing industry has incorporated AI technologies into production lines, particularly in electronics and machinery sectors.^[16]

Healthcare

The use of AI in healthcare in Taiwan has expanded in areas such as medical imaging, diagnostics, and drug development. AI systems are used to analyze CT scans, MRI data, and other clinical information to support diagnosis and treatment planning. Taiwan's healthcare sector, which includes medical devices, pharmaceuticals, and medical services, has benefited from the integration of AI technologies, particularly in precision medicine and clinical decision support systems.^[17] A notable example of AI healthcare deployment in Taiwan is the collaboration between Siemens Healthineers, Ever Fortune AI, and Asia University Hospital.^[18]

Edge computing and IoT

AI applications in Taiwan increasingly involve edge computing, where data processing occurs near the source rather than in centralized cloud systems. This approach reduces latency and bandwidth requirements and is used in smart devices, sensors, and industrial equipment. Edge AI technologies are applied in areas such as smart appliances, industrial automation, and transportation systems.^[19]

Education and talent development

Human capital development has been a key focus of Taiwan's AI strategy. The Taiwan AI Academy, established in 2018 with support from Academia Sinica and industry partners, provides training programs for professionals and students aimed at accelerating the adoption of artificial intelligence technologies across industries.^[20]

The academy offers a range of courses, including executive-level programs, technical training, and specialized tracks in areas such as smart manufacturing, smart healthcare, and edge AI. These programs are designed to provide intensive and practical instruction over relatively short periods. A notable component of the curriculum is project-based learning, in which participants are required to complete proof-of-concept (POC) projects addressing real-world industrial problems. These projects are often developed further for implementation within companies, facilitating technology transfer and commercialization.^[21]

Between 2018 and 2021, more than 8,000 individuals completed AI training programs across campuses in Taipei, Hsinchu, Taichung, and Tainan. Graduates of the academy have contributed to the introduction of AI systems in sectors such as manufacturing, healthcare, and finance, supporting broader industrial transformation efforts.^[20]

In addition to the Taiwan AI Academy, universities and research institutions in Taiwan play a significant role in AI education and research. Leading universities have expanded programs in computer science, data science, and machine learning, while research institutes conduct applied and fundamental studies in artificial intelligence. Collaboration between academia, government, and industry is a common feature of Taiwan's AI ecosystem, with joint research projects, internship programs, and technology incubation initiatives supporting talent development.^[22]

Government-supported initiatives have also sought to attract and retain AI talent, including funding for graduate education, international collaboration programs, and incentives for industry–academic partnerships. These efforts aim to address talent shortages and strengthen Taiwan's capacity in both applied and foundational AI research.^[23]

Regulation and governance

Taiwan has developed guidelines and policy frameworks to address the risks associated with AI technologies. In 2023, the Executive Yuan issued guidelines for the use of generative AI in government agencies, focusing on data security and privacy.^[24] Ongoing policy discussions have addressed ethical considerations, including transparency, accountability, and the prevention of harm. Taiwan's approach to AI governance has been influenced by international developments, including regulatory frameworks in the European Union.^[25]

Companies

The following is a list of Taiwan-based AI companies:

Challenges

Despite its strengths, Taiwan's AI industry faces several challenges:

Limited presence in foundational AI research compared to larger economies
Dependence on external platforms for advanced AI software
Constraints in data availability for machine learning applications
Competition from major global AI developers, particularly in the United States and China

Addressing these challenges requires continued investment in talent, research, and international collaboration.^[4]

Future development

The future development of the AI industry in Taiwan is expected to focus on three main areas: technological innovation, expansion of applications, and ecosystem development. These priorities reflect both domestic policy objectives and broader trends in the global AI landscape.

Technological innovation

Taiwan's existing strengths in semiconductor manufacturing and information and communications technology are expected to remain central to its AI development. Ongoing research and development efforts focus on the design of high-performance and energy-efficient AI chips, including processors optimized for machine learning and edge computing. Advances in hardware are expected to support increasingly complex AI models and applications, particularly in data-intensive fields.^[26]

At the same time, efforts are being made to strengthen capabilities in AI software and algorithms, an area where Taiwan has traditionally been less prominent. Government-supported initiatives and academic research programs aim to expand expertise in machine learning, natural language processing, and computer vision. The integration of hardware and software development is considered an important factor in enhancing Taiwan's competitiveness in the global AI industry.^[22]

Ecosystem development

The development of a comprehensive AI ecosystem has been identified as a key objective by policymakers. This includes the expansion of computing infrastructure, such as data centers and high-performance computing systems, as well as the availability of large and diverse datasets required for machine learning. Talent development remains a central component of ecosystem growth, with continued investment in education, training, and international collaboration. Government policies have also emphasized the importance of fostering startups and supporting small and medium-sized enterprises in adopting AI technologies.

In addition, regulatory frameworks and ethical guidelines are expected to play an increasingly important role. Taiwan has been working toward establishing governance mechanisms that address issues such as data privacy, algorithmic transparency, and the safe deployment of AI systems. These efforts are intended to align with international standards while supporting domestic innovation.^[27]

Economic role

The integration of AI with Taiwan's existing industrial base is expected to play a central role in economic development. In particular, the combination of advanced manufacturing capabilities and AI technologies is anticipated to accelerate digital transformation across industries. This includes the adoption of Industry 4.0 practices, the development of new business models, and the creation of higher value-added products and services.^[28]

AI is also expected to contribute to Taiwan's participation in global technology supply chains, particularly in areas related to semiconductor production, AI hardware, and smart devices. While challenges remain, including global competition and resource constraints, the continued development of AI is regarded as an important component of Taiwan's long-term economic and technological strategy.^[29]

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