MOEA: Two Trillion Twin Stars - The mistake was insufficient innovation

(Taiwan Business News) The Ministry of Economic Affairs said yesterday that the "Two Trillion Twin Stars" policy had its own temporal and spatial context, and that in recent years the government has also actively promoted industrial structural transformation and the revitalization of traditional industries, and has fostered the development of promising mid-tier enterprises.

New Taipei City Mayor Eric Chu criticized the "Two Trillion Twin Stars" formulated by the Ministry of Economic Affairs 10 years ago as a nightmare and a gravely mistaken industrial policy that left Taiwan's industries with the consequence of uneven resource allocation.

Regarding the above remarks, MOEA officials said that Taiwan performed quite well in the semiconductor and panel industries in the past, with the panel industry being an area of advantage for Taiwan and South Korea, and the semiconductor industry being an area of advantage for Taiwan, the United States, South Korea and Japan.

The officials pointed out that although current performance is not very good, at the time Taiwan actually had strong development opportunities in both of these two major fields, "once earning one capital's worth in a single year," creating many jobs and foreign exchange earnings.

The officials said that with the recent rise of the mainland, coupled with Taiwan itself failing to open up a leading gap in innovation, this has led to the ensuing problem of competitiveness or value being unable to improve.

As times and circumstances have changed, the officials said, the Executive Yuan and the Ministry of Economic Affairs are also thinking about how to raise the value of traditional industries or identify enterprises in Taiwan with development potential, and therefore in recent years have begun promoting policies such as the revitalization of traditional industries, fostering the development of mid-tier enterprises, and the Three Industries and Four Transformations (servitization of manufacturing, technologization and internationalization of services, and characterization of traditional industries).

Since one part of the "Two Trillion Twin Stars" refers to semiconductors, the officials stressed that semiconductors are not only DRAM, and that Taiwan still has many semiconductor companies, such as TSMC and MediaTek, that are developing quite well.

The officials said that how these two industries, panels and semiconductors, will be adjusted, transformed and upgraded in the future also involves issues of global supply and demand and cross-strait relations. Taking panels as an example, they are thinking about how, under the framework of the Cross-Strait Economic Cooperation Framework Agreement (ECFA), to enable industries on both sides of the strait to benefit mutually, for instance by seeking preferential tariffs or promoting cross-strait industrial cooperation in the goods trade negotiations.