The legislature’s Judiciary and Organic Laws and Statutes Bureau has called for a legislative amendment to better protect the nation’s semiconductor industry, which it said has been affected by global events such as Russia’s invasion of Ukraine and the COVID-19 pandemic.
The bureau said in a report that the Integrated Circuit Layout Protection Act (積體電路電路布局保護法) should be amended to better protect the industry and spur growth.
“Taiwan accounts for 70 percent of total wafer output worldwide, and the output value of Taiwan’s semiconductor industry is roughly 19.8 percent of the global total — second only to the US,” it said.
Chip production is under pressure from the Ukraine war, which has halted operations of two major suppliers of neon gas — a key material for making chips, the report said.
As chips become more important and supply contested, some countries have been amending their laws to protect chip production and related intellectual properties, it said.
For example, the US has passed the Creating Helpful Incentives to Produce Semiconductors and Science Act to boost semiconductor research and encourage investment in the industry, while South Korea in November last year unveiled its K-Semiconductor Belt Strategy that includes a US$450 billion investment in the country’s chip industry, the report said.
India announced a US$10 billion investment in December last year and the European Commission unveiled a similar plan in February this year, which is expected to result in a 43 billion euro (US$44.1 billion) investment in the industry, it said.
The government’s strategy for boosting the competitiveness of Taiwan’s semiconductor industry relies primarily on providing subsidies and incentives to companies and individuals, the report said.
However, while there have been regular amendments to the Income Tax Act (所得稅法), the Company Act (公司法) and other laws, the Integrated Circuit Layout Protection Act has not been amended in 20 years, it said.
One reason might be that due to changes in semiconductor industry practices, fewer firms have been seeking registration and protection of integrated circuit layouts — which is the primary function of the law, it said.
Companies consider the protection of trade secrets important, but they have adopted different strategies to do so, such as seeking patent applications, the report said, adding that laws should be regularly reviewed and revised according to the industry’s changing needs.
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