CAPTURING GROWTH IN ASIA'S 6TH LARGEST MARKET - OPPORTUNITIES IN TAIWAN FOR SWEDISH COMPANIES - CONFIDENTIAL - Business Sweden

 
CAPTURING GROWTH IN ASIA'S 6TH LARGEST MARKET - OPPORTUNITIES IN TAIWAN FOR SWEDISH COMPANIES - CONFIDENTIAL - Business Sweden
CONFIDENTIAL
FOR INTERNAL USE WITHIN
CLIENT COMPANY ONLY

CAPTURING GROWTH IN ASIA’S 6TH
LARGEST MARKET – OPPORTUNITIES IN
TAIWAN FOR SWEDISH COMPANIES
January 2019
Business Sweden Taiwan
CAPTURING GROWTH IN ASIA'S 6TH LARGEST MARKET - OPPORTUNITIES IN TAIWAN FOR SWEDISH COMPANIES - CONFIDENTIAL - Business Sweden
AGENDA

 Business Sweden in APAC and Taiwan

 Taiwan overview

 Key business opportunities for Swedish companies

 Sweden in Taiwan

                                                     28 JANUARY, 2019
CAPTURING GROWTH IN ASIA'S 6TH LARGEST MARKET - OPPORTUNITIES IN TAIWAN FOR SWEDISH COMPANIES - CONFIDENTIAL - Business Sweden
FOREWORD
                   As one of the four Asian Tigers, Taiwan's economy went through a remarkable growth journey between 1960 and the
                   1990s - making Taiwan one of Asia’s most developed economies, ranking 18th globally in GDP per capita (PPP).
                   Today, Taiwan has a more modest growth rate compared to some of its Asian peers, with around 2.5% GDP growth
                   expected for the coming years. An aging population, a complex geopolitical situation, and increased protectionism
                   and trade war are some of threats to Taiwan's economic growth.
                   The success story of Taiwan's economy has partly been driven by the specialization within high-technology
                   electronics manufacturing, and the small island is home to many global tech giants such as Foxconn, TSMC,
                   MediaTek and Asus. And despite being a relatively small economy, Taiwan and Taiwanese companies play a critical
                   role in the global electronics supply chain, with 13 of the top 100 global technology leaders originating from Taiwan.
                   However, Taiwan is not only about high-tech electronics. As a developed and open economy, with a GDP larger than
 Nice picture of   Sweden's, it also brings many opportunities for innovative and sustainable Swedish solutions and technologies within
101 for instance   other industries such as healthcare, transportation, energy as well as retail.
                   Today, there are over 80 Swedish companies present in Taiwan, and many more active through distributors or
                   agents. Despite the vast distance between Sweden and Taiwan, our economies sees significant trade, with a steady
                   increase both on exports and imports. However, we believe there is significant untapped potential for Swedish
                   companies in Taiwan, and we hope to se increased trade and investment between Sweden and Taiwan in the future.
                   We hope this study will bring insights that can support Swedish companies that are currently operating in Taiwan as
                   well as those who are planning to establish themselves here.

                                                                      Vlad Månsson                               Håkan Jevrell
                                                                      Market Manager Taiwan &Director of Trade   Representative
                                                                      Business Sweden Taiwan                     Business Sweden Taiwan

BUSINESS SWEDEN                                                                                                            28 JANUARY 2019   3
CAPTURING GROWTH IN ASIA'S 6TH LARGEST MARKET - OPPORTUNITIES IN TAIWAN FOR SWEDISH COMPANIES - CONFIDENTIAL - Business Sweden
BUSINESS SWEDEN IN APAC

   BUSINESS SWEDEN SUPPORT SWEDISH COMPANIES’
   REVENUE GROWTH IN APAC
   150 locally-anchored growth experts..        ..with a well-spread footprint in APAC..                 ..driving growth for Swedish companies

                                                                                                               MARKET EXPANSION

                     15           Offices
                                                                                                                    Market Entry
                                                                                                                    Market Growth
                                                                                                                                                   Sales Channel
                                                                                                                                                    Optimization
                                                                                                                                                   M&A and Alliances

                  20+
      Strategic                                                                                                     Customer
                                    markets                                                                          Segmentation
     support in

                                                                                                               PUBLIC AFFAIRS

             150                 Growth
                                 experts                                                                            Market Access Strategy
                                                                                                                    Stakeholder Analysis and Engagement
                                                                                                                    Government-to-Government Influencing

             500+
  Projects
performed
    yearly                                                                                                     SALES ACCELERATION
                                                                                                                    Bus. Development              Sales & Partner

             50%                   Local
                                   team
                                                                                                                     & Sales Execution
                                                                                                                    Partner Search &
                                                                                                                     Selection
                                                                                                                                                    Management
                                                                                                                                                   Mega Deals
                                                                                                                                                    (Tender Support)
                                Companies
                  95            housed in our
                                facilities
                                                                                                               BUSINESS INCUBATION & OPERATIONS
                                                                                                                        Establishment assessments and incorporation
                                                                                                                        Recruitment and Operational support
                                                                                                                        Office Space, Finance and HR Back Office
   Companies who work with us perceive us as:
       Specialized on revenue                   Unique in combining analytical                                                         Passionate about the success
                                                                                           Local, hands-on and agile
       growth in APAC                           skills with government access                                                          of Swedish companies

                                                                                                                                                     28 JANUARY, 2019
CAPTURING GROWTH IN ASIA'S 6TH LARGEST MARKET - OPPORTUNITIES IN TAIWAN FOR SWEDISH COMPANIES - CONFIDENTIAL - Business Sweden
AGENDA

 Business Sweden in APAC and Taiwan

 Taiwan overview

 Key business opportunities for Swedish companies

 Sweden in Taiwan

                                                     28 JANUARY, 2019
CAPTURING GROWTH IN ASIA'S 6TH LARGEST MARKET - OPPORTUNITIES IN TAIWAN FOR SWEDISH COMPANIES - CONFIDENTIAL - Business Sweden
TAIWAN OVERVIEW

TAIWAN IS ONE OF ASIA’S MOST DEVELOPED
ECONOMIES, WITH SIGNIFICANT SWEDISH PRESENCE
TAIWAN SNAPSHOT                                                                        SWEDEN & TAIWAN

                                                                                                                            Top categories:

                              23                                         MULTI-PARTY
                                                                         DEMOCRATIC
                                                                                                            4.1             1. Transport &
                                                                                                                               vehicles (25%**)
                                                                                         SWEDISH        B SEK (2017)        2. Machinery and
                            MILLION                                       REPUBLIC
                                                      POLITICAL                          EXPORTS        (+7.8% FROM 2016)      equipment (23%)
  POPULATION                                           SYSTEM                           TO TAIWAN                           3. Iron & steel (13%)

                                                                                                                            Top categories:

                         2.7%                                                  $25 K                        6.7             1. Machinery and
                                                                                                                               equipment (42%)
                                                                                         IMPORTS     B SEK (2017) 2. Metalworking (26%)
 GDP GROWTH                                             GDP PER
                                                                                       FROM TAIWAN (HIGHEST IN HISTORY, 3. Nails, pins, screws,
         (2018)                                         CAPITA*                         TO SWEDEN    +8.9 % FROM 2016)     bolts (13%)

                                                        Largest trading partners:
                                                        1. China
                                                        2. USA
                                                                                                                            ~ # 85
                                                        3. Japan                                                     SWEDISH COMPANIES
                                                        4. Hong Kong                                               ESTABLISHED IN TAIWAN***
                                                        5. EU
                                                        6. Korea
                                                        …
                                                        …
Taiwan is located in the West Pacific, a strategic      39. Sweden
location for both North Asia and South East Asia

* NOMINAL $US PRICES (SWEDEN: $53 220). IN PPP SWEDEN AND TAIWAN ARE SIMILAR
** SHARE OF TOTAL EXPORTS / IMPORTS
*** BASED ON OUR KNOWLEDGE AND DEFINITION OF SWEDISH COMPANY
CAPTURING GROWTH IN ASIA'S 6TH LARGEST MARKET - OPPORTUNITIES IN TAIWAN FOR SWEDISH COMPANIES - CONFIDENTIAL - Business Sweden
TAIWAN OVERVIEW

TAIWAN EMERGED AS AN ADVANCED ECONOMY DURING
THE TECH TRANSFORMATION IN THE 90’S
TAIWAN GDP PER CAPITA (NOMINAL)
1955 – 2017, USD PER PERSON & YEAR                                                                          GDP per capita
                                                                                                            exceeds
                                                              Transform to                                  USD 20,000       25,534
                                                              technology based
                                                                                        GDP per capita
                                                              industry, one of Four
                                                                                        exceeds
                                                              Asian Tigers
 Transform from                       10 major projects to                              USD 10,000
 agriculture based                    boost transport,
 to industrial based                  infrastructure and
 export economy                       heavy industry sector

  216
   1955                     1964            1973                 1982                 1991           2000     2009                 2018

TAIWAN IS A DEVELOPED ECONOMY THAT OFFERS OPPORTUNITIES FOR ADVANCED PRODUCTS AND SOLUTIONS

SOURCE: NATIONAL STATISTICS, TAIWAN

                                                                                                                       28 JANUARY, 2019
TAIWAN OVERVIEW

 THE DEVELOPED ECONOMY IS AN ATTRACTIVE MARKET
 FOR SWEDISH COMPANIES EXPANDING IN ASIA
                                                                                    WHY TAIWAN

                                      Sizeable domestic                          Excellent test market                 One of Asia’s most
                                       market with high                           or base for further                  attractive business
                                      purchasing power                            expansion in Asia                       environments
                   JAPAN           World’s 21st largest economy                Taiwanese companies are large        Ease of Doing Business
                                    and the 6th in Asia by GDP                   investors in China as well as         ranking of #15 in the world
CHINA           KOREA               (Sweden 22nd)*                               SEA                                   and #4 in Asia

                                   Home to 23M people with the                 Taiwanese influence in SEA           Culture of openness and
                                    3rd highest GDP per capita in                expected to further increase          acceptance of foreign brands
                                    East Asia after Singapore and                with Southbound policies
                                    Hong Kong**                                                                       Stable democracy and low
                  TAIWAN                                                                                               corruption
                                                                             Mature market in need                    Good infrastructure and easy
                                       Home to large                                                                   to set up a company
                                                                               of innovative and
                                      OEM’s/ODM’s with
                                                                                 sophisticated                        High-quality talents
                                       global footprint
                                                                                   technology                          (especially engineers) and
                                                                                                                       loyal labor force
        ASEAN                     Global supply base for high-quality           Developed industries with
                                   products within ICT, car parts,                automated manufacturing             Strong protection of IP
                                   textile, machinery etc.                        continuously looking for
                                                                                  state-of-the-art technology
                                  Home to many large OEMs/ODMs
                                   like Asus, Acer, Foxconn, TSMC,               Industry transformation from
                                   Kymco and Giant with key                       contract manufacturing to
                                                                                                                 *IMF NOMINAL GDP RANKING 2018. MIDDLE EAST NOT
                                   decision-making in Taiwan                      high value and solutions-      INCLUDE IN ASIA
                                                                                  based business                 **GDP PER CAPITA (PPP) EXCLUDING BRUNEI

                                                                                                                                      28 JANUARY, 2019
TAIWAN OVERVIEW

THE IMPORTANCE OF TAIWAN IN THE GLOBAL SUPPLY
CHAIN IS OFTEN OVERLOOKED

 WHAT YOU DIDN’T KNOW ABOUT TAIWAN..

                      Taiwan, ”the bicycle kingdom”, remains the key player in the global biking
                         industry, with over 50% of medium- and high end bicycles globally
                              manufactured in Taiwan or in Taiwanese-owned factories

                          Out of the 100 Global Technology Leaders, 13 are from Taiwan
                                  (Taiwan is the 2nd-highest ranked after the US)

                               Taiwan is well-positioned in the global move towards electric vehicles -
                                   20 Taiwanese companies are key component suppliers to Tesla

                      Taiwan still plays a key role in the global textile supply chain: 16/32 of the
                     national teams in the FIFA World Cup have their jerseys made in / by Taiwan

                        Despite a tense geopolitical climate, Taiwan remains one of the key FDI sources to
                         China – and out of the top 100 exporters from China to the US, 35 are Taiwanese
SOURCE: IMF, THOMSON REUTER, NEWS, CHINESE INSTITUTE OF ECONOMIC RESEARCH   * EXCLUDING MIDDLE EAST AND RUSSIA

                                                                                                                 28 JANUARY, 2019
TAIWAN OVERVIEW

THE TAIWAN ECONOMY IS EXPECTED TO STAY STRONG,
BUT TRADE WAR AND AGING POPULATION A CONCERN
                             GDP Growth (%)                                                                        Unemployment rate (%)
                         Taiwan           Advanced economies                                                       Taiwan         Advanced economies
 5                                                                                        8
 4                                                                                        6
 3
                                                                                          4
 2
 1                                                                                        2
 0                                                                                        0
      2014   2015 2016       2017    2018 2019       2020    2021 2022         2023            2014     2015    2016   2017   2018   2019   2020    2021   2022     2023

         Growth around 2% expected mid-term from Taiwan. Forecast for                             Unemployment rate overall on very low levels. Despite trade war,
          2018 and 2019 revised upwards to 2.7 vs 2.4 % - somewhat                                  Taiwan employment rate reached an 18-year low and stood at
          higher than global average for advanced economies                                         3.75% in October 2018.

                    Purchasing Managers Index                                                                  Population structure (millions)
                                                                  Trump tariffs on                  0-14 years old       15-64 years old      Above 65 years old
     57                                                                                  25
                                                                      China
                                                                                         20
     52
                                                                                         15
     47                                                                                  10
                                                                                           5
     42
                                                                                           0

         PMI index has been very strong during end of 2017 and early                                Population rapidly getting older with 14% of the population above
          2018, but declining rapidly with the trade war. Taiwan is highly                            65 years. Peak of Taiwan's working population is now!
          dependent on global trade with export standing for ~50% of GDP

SOURCE: IMF, NIKKEI PMI, NATIONAL STATISTICS TAIWAN, STANDARD CHARTERED BANK          * DATA AS OF DECEMBER 2018

BUSINESS SWEDEN                                                                                                                                         28 JANUARY, 2019   10
US-CHINA TRADE WAR IMPACT ON TAIWAN

TAIWAN IS STUCK IN BETWEEN THE US-CHINA TRADE
WAR – WITH MAJOR RISKS, BUT ALSO OPPORTUNITIES
EXPOSURE TO CHINA (% OF GDP)                             US IMPORTS FROM CHINA & TW SHARE*                         MEASURES FROM TAIWAN
                                                                                                                                   Government through MOEA/MOST are
    Singapore                                                                                                                       offering tax and R&D subsidies and favorable

                                                                                                                   Government
                                                                                                        4.9%                        financing for companies moving back to TW
        Taiwan
                                                        Electrical and
                                                           optical                                                                 For industries with high degree of manual
      Vietnam                                                                159 B                                                  labor, government is supporting to drive
                                                                                                                                    production towards ASEAN, with consultancy
      Malaysia                                                                           0.1%                                       help and industrial clusters

 South Korea                                             Wholesale
                                                                              62B
                                                         and retail                                                                Quanta recently announced an NTD 4.28
      Thailand                                                                                                                      billion investment in Taoyuan, and we also
                                                                                             1.3%                                   see expansion by Inventec and Supermicro
      Australia                                          Textile and
                                                          footwear           48 B                                                  Giant and Merida moving high-value items out
                                                                                                                                    of China to Taiwan (and a trend that low-value

                                                                                                                   Companies
         Japan
                                                                                                                                    item production is shifting to ASEAN)
     Indonesia                                                                             0.9%
                                                                                                                                   Accton move back 35% China capacity to
                                                        Chemicals and        31 B
   Philippines                                            minerals
                                                                                                                                    Taiwan, the rest will move directly to the USA.

                                                                                                                                   Universal Microwave Technology to relocate
            India                                                                                                                   production to ASEAN by acquiring a
                                                                                             1.5%
                                                          Machinery and
                                                                                                                                    Malaysian company
                    0    5     10    15    20    25                          30 B
                                                           equipment

           Taiwan still heavily reliant on                       Increased tariffs on electrical and optical                     Increased investments likely seen in Taiwan
            China with 40% of Taiwan's                             equipment will have a major impact on                            by companies heavily affected by the Trade
            exports going to China (incl. HK)                      Taiwan                                                           war – shift towards ASEAN also clear

SOURCE: BLOOMBERG, NIKKEI, NATIXIX, STANDARD CHARTERED, BUSINESS SWEDEN ANALYSIS          * ON A VALUE-ADD BASIS

BUSINESS SWEDEN                                                                                                                                                 28 JANUARY, 2019   11
BUSINESS IN TAIWAN

TAIWAN IS A STABLE INNOVATION HUB CONSISTENTLY
SCORING HIGH IN INTERNATIONAL RANKINGS
 A WELCOMING BUSINESS CLIMATE                                                                 INTERNATIONAL RANKINGS

                  Welcoming to expats – Taipei placing 1st among                               #4 globally in Innovation Capability in the World Bank’s Ease of
                  cities globally in InterNations Expat Insider 2018                              Doing Business report, which refers to Taiwan as one of the four
                                                                                                  ”super innovators” alongside Germany, the US and Switzerland.

                  Ideal for doing business – little red tape and the
                  possibility to set up an entity within 4 weeks (rep.                         #4 in East Asia in the Ease of Doing Business report
                  office)

                  Stable salary levels – good access to high-quality
                                                                                               #4 in ASIA in IPRI’s Intellectual Property ranking*
                  talent at an affordable cost (average salary increase
                  of 3% last years as opposed to 7% in China)
                                                                                               #4 in APAC in the 2018 Global Competitive Index report
                  Taiwan is a high-trust society offering strong IP
                  protection, a high-quality workforce and a vibrant,
                  innovative business climate
                                                                                               #5 least corrupted country in the APAC region according to
                                                                                                  Transparency International*

HIGH-TRUST SOCIETY, DEMOCRATIC VALUES AND FOCUS ON INNOVATION ALIGN WELL WITH SWEDISH CORPORATE VALUES

SOURCES: THE WORLD BANK: DOING BUSINESS 2018; TRANSPARENCY INTERNATIONAL, CORRUPTION INDEX 2017; INTERNATIONAL PROPERTY RIGHTS INDEX 2018:
         WORLD ECONOMIC FORUM, THE GLOBAL COMPETITIVENESS REPORT 2018; INTERNATIONS, EXPATS INSIDER 2018;
                                                                                                                                                   28 JANUARY, 2019
AGENDA

 Business Sweden in APAC and Taiwan

 Taiwan overview

 Key business opportunities for Swedish companies

 Sweden in Taiwan

                                                     28 JANUARY, 2019
KEY BUSINESS OPPORTUNITIES

BUSINESS OPPORTUNITIES WITHIN KEY INDUSTRIES
MATCH WELL WITH SWEDEN’S COMPETENCE AREAS
    KEY SECTORS FOR
   SWEDISH COMPANIES
                                                TRENDS                                          OPPORTUNITIES
                                World leaders in ICT, machinery, automotive            Equipment supply to key industries
                                 parts, high-tech textile manufacturing              
            HIGH-TECH                                                                    Software and IOT solution
          MANUFACTURING         Strong supply chain integration with China and         Smart and green production solution
                                 the region with decision-making in Taiwan
                                Modernization of transport sector with 10,000          Supply chain to electric bus expansion in
                                 electric buses needed by 2030                           Taiwan
            TRANSPORT           The Taoyuan Aerotropolis project is the largest        Sustainable vehicles and smart transportation
                                 national urban plan at a value of USD 17 billion
                                Well-established national insurance and                Healthcare solutions for aging societies like
                                 reimbursement system with universal coverage            connected healthcare, elderly care equipment
            HEALTHCARE          One of the fastest-aging societies in the world
                                                                                         and systems and precision medicine that can
                                                                                         reduce costs and increase quality of care
                                 with 20% of population above 65 years old in 2026
                                Increasing share of renewable energy to 20%            Equipment and solutions to offshore wind
                                 by 2025 long term phase out of nuclear power            power sector for Taiwan and Asian markets
               ENERGY                                                                   Solutions for nuclear power plant decommissioning
                                Offshore wind power plan with USD 30 billion
                                 of investment for 5.5 GW by 2025                       Smart energy and energy efficiency solutions

                                High purchase power in Asia and high                   Organic or functional foods with health
             RETAIL AND          acceptance of Scandinavian consumer brands              benefits
               FOOD             Swedish food exports to Taiwan increasing              Consumer products targeting middle-class
                                 rapidly with annual growth rate by 40%                  consumers

                                                                                                                     28 JANUARY, 2019
AGENDA

 Business Sweden in APAC and Taiwan

 Taiwan overview

 Key business opportunities for Swedish companies

  High-tech manufacturing
  Transport
  Healthcare
  Energy
  Retail and food

 Sweden in Taiwan

                                                     28 JANUARY, 2019
KEY BUSINESS OPPORTUNITIES – HIGH-TECH MANUFACTURING

TAIWAN IS A MANUFACTURING POWERHOUSE FOR HIGH
TECH ICT, AUTOMOTIVE, MACHINERY AND TEXTILE
HIGH-TECH MANUFACTURE                           AREAS OF OPPORTUNITY      KEY CONSIDERATIONS
 ICT is the biggest manufacturing industry
  and export segment in Taiwan
                                                     EQUIPMENT &
 For machinery, Taiwan is a global player           MACHINERY FOR
  for shoemaking, machine tools and textile          MANUFACTURE               UNDERSTAND VALUE
  machinery. Taiwan’s machinery industry is                                    CHAIN AND WHO ARE
                                                     NEW MATERIAL              KEY STAKEHOLDERS
  transforming to smart manufacturing                TECHNOLOGY WHICH
                                                     IMPROVE PRODUCT
 Taiwan auto parts, electronics and                 PERFORMANCE
                                                                               TARGET KEY
  bicycles are globally competitive                                            DECISION-MAKERS IN
                                                     SOURCING FROM             TAIWAN
                                                     TAIWAN
 For textiles, Taiwan is competitive for its
  functional and sustainable fabrics
                                                     SOFTWARE SOLUTION         LOCAL SUPPORT IS
                                                     TO BE BUNDLED WITH        CRITICAL TO SUCCESS
 Strong regional integration with major             HARDWARE FOR ICT
  factories in China and SEA but                     INDUSTRY
  headquarter and decision-making are in
  Taiwan

                                                                                        28 JANUARY, 2019
KEY BUSINESS OPPORTUNITIES – HIGH-TECH MANUFACTURING

TAIWAN’S MANUFACTURING INDUSTRIES AND
PRODUCTS ARE COMPETITIVE ON THE GLOBAL MARKET
 EXPORT & PRODUCTION VALUE, 2017                                             COMMENTS
 Export                                                                       ICT manufacturing accounts for 33% of total manufacturing and
 (USD billion)
                                                                               51% of total exports, and Taiwanese ICT companies are
110                                                                            important OEM/ODM partners to global IT brands such as
35
                                                                ICT            Apple, HP, Dell, Lenovo etc.
 30                                                                           In 2018, Microsoft, AWS, IBM and Google announced plans to
                                                                               invest in AI and big data centers in Taiwan. Taiwan continues to
 25                                                                            attract the IT giants to invest in Taiwan for its high-quality
                                                         Machinery             talents, policy support and strong IP protection
 20                                                                           In the Automotive industry, auto parts is the key segment for
                                                                               exports, with about 44% of exports going to the US, 6% to Japan
 15                                                                            and 5% to China. Taiwan is well-positioned in the global move
                                                                               towards EV with over 20 Taiwanese companies as key
 10                            Textile                                         components suppliers to Tesla

                                              Automotive and parts            Taiwan's machinery industry is seen as a truly global player.
  5                                                                            Overall, it ranks second in the world for the export of shoe-
                                                                               making machinery and fourth for the export of machine tools
  0                                                                           Taiwan is competitive for its functional and sustainable fabrics in
      0               10                 20      30           40      145      textiles. For instance, Taiwan manufactures over half of the
                                                             Production        World Cup team jerseys which use fabric made from recycled
                                                             (USD billion)     plastic bottle fibers

TARGET KEY TAIWANESE MANUFACTURERS TO REACH THE GLOBAL MARKET

SOURCE: MOEA, BUSINESS SWEDEN ANALYSIS

                                                                                                                                  28 JANUARY, 2019
KEY BUSINESS OPPORTUNITIES – HIGH-TECH MANUFACTURING

TAIWAN CONTINUES TO PLAY AN IMPORTANT ROLE IN
THE GLOBAL SEMICONDUCTOR INDUSTRY
 INDUSTRY DATA                                                              COMMENTS
 TAIWAN MARKET SHARE AND RANKING OF GLOBAL
                                                                             The semiconductor industry is very important to the Taiwanese
 SEMICONDUCTION INDUSTRY (USD BILLION), 2017
                                                                              economy with a total value of USD 81 billion (ranked the 3rd
                                                                              globally) which accounts for 15% of GDP

                                Taiwan        Global               16%       With the development of IoT, AI, sensors etc. the demand is high
                                                                              with projected annual growth rate of 6.6% to 2021 (higher
                                                                              than GDP growth of 2-3%)
                                                                  503        Taiwan has a complete IC* value chain from design, manufacture
                                                       1.6%                   to packaging with clusters of companies focusing on different
                                                                              parts of the value chain, something which is quite unique among
                                                                              the IC industries around the world
                                                       323                   Taiwan IC foundry and packaging ranks number one in the world
                                        21%                                   and IC design as number two (after the US)
            73%           56%                                                TSMC, the global number 1 IC foundry, invested about USD 17
                                                                              billion to build the world’s first 5nm fabs (state-of-the-art
                                         98                                   semiconductor technology) in Taiwan which will be in operation
            55            28                                                  by 2020
                                                                             TSMC has the global market share of 56% and is the key
        A: Foundry     B: Package   C: IC Design     D: IDM      IC value     supplier to Apple and other leading technology companies
                                                   (Including     chain:
                                                    memory)     A+B+C+D

OPPORTUNITIES FOR NEW MATERIAL AND PROCESS TECHNOLOGY FOR SEMICONDUCTOR INDUSTRY

SOURCE: MOEA: FORBES                                                                                                           * IC: INTEGRATED CIRCUIT

                                                                                                                              28 JANUARY, 2019
KEY BUSINESS OPPORTUNITIES – HIGH-TECH MANUFACTURING

TAIWAN MACHINERY INDUSTRY IS TRANSFORMING TO
SMART MACHINERY TO INCREASE COMPETITIVENESS
 INDUSTRY DATA                                                                    COMMENTS
  TAIWAN PRODUCTION AND EXPORT VALUE FOR KEY
                                                                                   The total production of the Taiwan machinery industry is about
  MACHINERY AND GLOBAL EXPORT RANKING
                                                                                    USD 37 billion with an export value of roughly USD 25.6
  (USD BILLION), 2017
                                                                                    billion (about 60%), Taiwan export value ranks 10th globally

                                   Production       Export                         The main export destinations are China (30%), the US (16%),
                                                                                    Japan (7%), South Korea (4%) and Vietnam (2%)
                                                                                   An investment of roughly USD 2.3 billion has been made in
           7.7                                                                      smart manufacturing by the industry in 2017
                                                                                   Smart Machinery is a key industry in the government’s major
                                                                                    industry initiative: “5+2 innovative industries”. To transform the
                                                                                    industry, the strategy is to:
            3.4
                                                                                      Assist the industry in integrating technologies like IoT and AI
                                           1.4                                         in order to develop smart machinery products
                           1.2                              1.1
                                                                      0.63            Develop the system integration industry to offer turn-key
                            1.0             1.2
                                                             1.0                       solutions for smart manufacturing
                                                                        0.6
                                                                                      Implement smart manufacturing to improve the manufacturing
      Machine tools      Textile        Plastics &       Shoemaking Woodworking
                                                                                       process and to target the domestic manufacturers followed by
                        machinery        Rubber           machinery
                                        machinery                                      exporting the service

SIGNIFICANT OPPORTUNITIES FOR COMPONENTS AND SERVICES FOR SMART MACHINERY

SOURCE: MOEA: TAIWAN ASSOCIATION OF MACHINERY INDUSTRY

                                                                                                                                        28 JANUARY, 2019
KEY BUSINESS OPPORTUNITIES – HIGH-TECH MANUFACTURING

TAIWAN AUTO PARTS, ELECTRONICS AND BICYCLES
ARE GLOBALLY COMPETITIVE
 INDUSTRY DATA                                                                    COMMENTS
  PRODUCTION VALUE OF AUTOMOTIVE INDUSTRY,
                                                                                   Taiwan finished vehicle production is mainly for the domestic
  (USD BILLION), 2016-17
                                                                                    market. Car companies like Ford, Toyota, Honda, Mitsubishi
                                                                                    have joint ventures in Taiwan for production

                                   2016      2017                                  Taiwanese local brand automaker Luxgen was founded in
                                                                                    2009 and is focused on the domestic market

                             +4%                                                   Auto parts industry consists mainly of SMEs and is globally
                                             +14%                                   competitive with wide diversity and high flexibility, sales are
              -3%               7.3
                          7.0                   6.9                                 primarily exports to global car makers. About 44% export to
          6.4 6.2                                                                   US market, 6% to Japan and 5% to China
                                          6.1
                                                                                   Strong growth for automotive electronics industry in 2017
                                                               +8%                  because of global move towards EV. Over 20 Taiwanese
                                                               3.7                  companies are key components suppliers to Tesla
                                                         3.4
                                                                           -8%     The yearly number of scooter production is about 1.2 million with
                                                                        1.7 1.6     70% for domestic sales and 30% for export. Taiwan has a couple
                                                                                    of own brands. The scooter industry is also moving toward
                                                                                    electrification. Gogoro is a well-known brand for E-scooters
                                                                                   Taiwan is home to well-known bicycle brands like Giant and
         Finished        Auto parts     Automotive     Scooter and      Bicycle     Merida. Taiwan produces high-end bicycles with average export
          vehicle                       electronics       parts                     value of USD 560 per bicycle in 2017

TAIWAN’S MIX OF KNOWLEDGE IN ICT AND AUTOMOTIVE BENEFITS FROM THE GLOBAL TOWARDS ELECTRIC VEHICLES

SOURCE: MOEA: TAIWAN TRANSPORTATION VEHICLE MANUFACTURERS ASSOCIATION

                                                                                                                                     28 JANUARY, 2019
KEY BUSINESS OPPORTUNITIES – HIGH-TECH MANUFACTURING

TAIWAN IS A FRONTRUNNER FOR ECO- AND
FUNCTIONAL TEXTILES
 INDUSTRY DATA                                                                COMMENTS
  EXPORT VALUE OF TEXTILE INDUSTRY
                                                                               Total production value of textile industry is USD 12.6 billion with
  (USD BILLION), 2016-17
                                                                                an export value of USD 10 billion (about 80%)
                                                                               Fabrics accounts for 70% of total export. The fabrics are
                                                                                exported to factories for final textile products
                                     2016       2017
                                                                               The biggest export markets are Vietnam (22%), China (19%), US
                                                                                (7%), Hong Kong (6.4%) and Indonesia (5.4%). The top 5
                                                          +1.1%                 countries accounts for about 60% of exports
                                                     6.70 6.80                 Taiwan is a frontrunner in terms of eco- and multifunctional
                                                                                textiles. About 70% of global functional textile comes from
                                                                                synthetic fiber from Taiwan
                                                                               In the value chain, fabrics companies are the innovative
                                                                                “converters” integrating the up- and downstream supply chain for
                                                                                international brand names allowing development of new products
                                       +6%                                      and quality control
                  -5.5%         1.40 1.50                             -3.7%
            0.82 0.78                                                          Taiwanese suppliers have strong ties with global brands like
                                                                  0.57 0.55     Nike and Adidas, which have high ambitions on their green
                                                                                roadmap and high requirements on the CSR standards of
               Fiber                Yarn               Fabrics     Clothes      suppliers

TAIWAN OFFERS A GLOBALLY HIGHLY COMPETITIVE AND SUSTAINABLE TEXTILE INDUSTRY

SOURCE: TAIWAN TEXTILE FEDERATION; BUSINESS SWEDEN INTERVIEW

                                                                                                                                   28 JANUARY, 2019
KEY BUSINESS OPPORTUNITIES – HIGH-TECH MANUFACTURING

ATLAS COPCO’S SUCCESS IS DRIVEN BY LONG-TERM
COMMITMENT AND STRONG CLIENT RELATIONS
       THE COMPANY                                                    KEY SUCCESS FACTORS

                                                                 DIRECT AND HANDS-ON SUPPORT TO KEY CLIENTS
                                                                  Atlas Copco can provide direct support to high-tech clients thanks
                                                                   to their high technology knowledge and hands-on service
                                                                  Clients are involved throughout the whole process; from planning
  Atlas Copco is the world leader for innovative compressors,     and construction to installation and after-sales service
   vacuum solutions and air treatment systems, construction
   equipment, power tools and assembly systems                   SOLID BUSINESS AND BRAND
                                                                  High-tech clients cannot afford losses from production
                                                                   suspension, thus it is important to be a trustworthy company to
                                                                   the client
       THE CASE
                                                                 BE THE TECHNOLOGY AND SUSTAINABILITY LEADER
  Atlas Copco has been in Taiwan since 1959 through an           Atlas Copco is the technology leader continuously developing
   agent and with their own presence since 1980                    better products which allow for additional energy savings of 5%
                                                                   every 5 years. This helps clients look long-term and to consider
  Atlas Copco focuses on key technology offerings like oil-       the cost-saving throughout the whole product life cycle
   free compressors and high-quality air dryers to meet the
   high quality demand from high-tech industries
                                                                  “To work with the high-tech market, your companies need to have
  Atlas Copco is the number one supplier of compressors               long-term core values like innovation, sustainability and
   and vacuum equipment for the semiconductor industry in                                   commitment.”
   Taiwan

                                                                             John Demers, General Manager, Atlas Copco Taiwan
SOURCE. INTERVIEW

BUSINESS SWEDEN                                                                                                      28 JANUARY 2019   22
AGENDA

 Business Sweden in APAC and Taiwan

 Taiwan overview

 Key business opportunities for Swedish companies

  High-tech manufacturing
  Transport
  Healthcare
  Energy
  Retail and food

 Sweden in Taiwan

                                                     28 JANUARY, 2019
KEY BUSINESS OPPORTUNITIES – TRANSPORT

BUSINESS OPPORTUNITIES ARE IDENTIFIED FOR
SUSTAINABLE VEHICLES, RAILWAY AND AIRPORT CITY
TRANSPORT                                     AREAS OF OPPORTUNITY      KEY CONSIDERATIONS

 Taiwan government has announced policy           EQUIPMENT AND             FOLLOW
  goals to replace all city buses with             CONTROL SYSTEM            DEVELOPMENT OF
  electric buses by 2030                           FOR RAILWAY               GOVERNMENT PLAN
                                                   CONSTRUCTION              AND TENDER

 Major investment is planned in Taiwan for                                  MAP THE
  railway upgrades and metro construction          ELECTRIC VEHICLES
                                                                             STAKEHOLDERS AND
  is ongoing                                       AND SUB-SYSTEMS
                                                                             SUPPLY CHAIN

 The Taoyuan Aerotropolis project is the                                    RIGHT VEHICLE TO
  largest national urban plan covering an          SUSTAINABLE BUSES         APPROACH KEY
  area of ha 4,565 and total investment of         AND TRUCKS                GOVERNMENT
  over USD 16 billion. The goal is to                                        STAKHOLDERS
  transform the Taoyuan airport city into a
  trade hub in Asia
                                                   SOLUTION FOR PORTS        USE TAIWAN AS A
                                                   AND AIRPORT CITY          LOGISTICS HUB TO
                                                                             ASIA

                                                                                      28 JANUARY, 2019
KEY BUSINESS OPPORTUNITIES – TRANSPORT

LARGE EXPANSION OF ELECTRIC BUSES WITH 10,000
UNITS EXPECTED BY 2030
 INDUSTRY DATA                                                                                   COMMENTS

 NUMBER OF EV BUSES IN TAIWAN, 2013-2030                                                          To deal with air pollution from vehicles, Taiwan government is
                                                                                                   scraping out Phase I & II trucks and expects to implement
                                                                                                   Euro 6 equal standard from Sept. of 2019
                                                                                                  Taiwan government announced “Air Pollution Control Action

                                                     9K BUSES TO BE PURCHASED TO 2030
                                                                                        10 000     Plan” in end of 2017 and one of the policy goals is to replace
                                                                                                   all city buses to EV buses by 2030
                                                                                                  Among the 10,000 city buses, there are currently about 400
                                                                                                   EV buses in Taiwan
                                                                                                  The government has a plan to develop local EV bus industry and
                                                                                                   set a requirement of local contents of 50% to get the
                                                                                                   government subsidy for EV buses
                                                                                                  There are five Taiwanese EV bus vehicle assembly
                                                                                                   companies, four have technology cooperation with Chinese
                                                                                                   companies (like BYD, Golden Dragon etc.). RAC Electric
           84       135      168      249    313    400                                            Vehicle is the one with own design and manufacturing
                                                                                                   capabilities
         2013     2014      2015      2016   2017   2018                                2030
                                                                                                  For key components, Taiwan can supply power, battery, battery
                                                                                         (f)
                                                                                                   management system, transmission controller, telematics…etc.

COMPANIES NEED TO BE AWARE OF THE TIMELINE AND POLICY OF THE GOVERNMENT PLAN

SOURCE: ARTC; EXECUTIVE YUAN , MOTC

                                                                                                                                                     28 JANUARY, 2019
KEY BUSINESS OPPORTUNITIES – TRANSPORT

SIGNIFICANT OPPORTUNITIES IN SECTORS RELATED TO
METRO AND RAILWAY CONSTRUCTION AND UPGRADES
 INDUSTRY DATA                                                                 COMMENTS

 BUDGET FOR RAILWAY CONSTRUCTION AND UPGRADE,                                   Total budget for the railway construction in the Forward-looking
 TOTAL BUDGET = USD 1.4 BILLION, 2019-2020                                       Infrastructure Development Program, Phase II (2019-2020) is
                                                                                 USD 1.4 billion. The program consists of 5 sub-projects.
                                3%     2%                                       The biggest of the 5 sub-projects, “Upgrade and improve
                                                                                 conventional rail services in Eastern Taiwan”, covers
                                                                                 electrification of the round-the-island railway system, dual
                                                                                 tracks for the eastern part and smart ticket and control
                          25%                                                    systems
                                                      48%                       In addition, the Taiwan Railway Administration will procure
                                                                                 1,300+ trains, including 127 locomotives and 60 special bio-
                                                                                 diesel/energy storage trains which create opportunities for
                                                                                 board equipment and control systems
                                22%
                                                                                Major plans in the “Promote urban mass rapid transit” sub-
                                                                                 project include the new Sanying Metro Line in New Taipei City
                                                                                 and Aerotropolis City in Taoyuan
         Upgrade and improve conventional rail services in Eastern Taiwan
         Move rail tracks above or underground, speed up commuter services      Major plans for sub-project “Move rail tracks above or
                                                                                 underground, speed up commuter services” include the cities of
         Promote urban mass rapid transit
                                                                                 Taichung, Taoyuan, Tainan and Chiayi
         Link highspeed and conventional rail into an integrated network
         Build tourism-oriented rail systems for central and southern Taiwan

KEY TO PARTNER WITH LOCAL ENGINEERING COMPANIES FOR INFRASTRUCTURE PROJECTS

SOURCE: NEWS; EXECUTIVE YUAN

                                                                                                                                   28 JANUARY, 2019
KEY BUSINESS OPPORTUNITIES – TRANSPORT

AEROTROPOLIS PROJECT TO UPGRADE THE AIRPORT
CITY TO A TRADE AND LOGISTICS HUB IN ASIA
 INDUSTRY DATA                                       COMMENTS

                                                      Taiwan is geographically located at the center of the Asia-
       Total Area: ha 4,565                            Pacific, connecting Northeast and Southeast Asia. The
       Total Investment estimation: USD 16 billion     average fly time from Taipei to the six major cities Tokyo, Seoul,
                                                       Beijing, Shanghai, Hong Kong and Singapore is 3 hours
                                                      The Taoyuan Aerotropolis project is the largest national urban
                                                       development plan. It covers an area of ha 4,565 and total
                                                       investments of over USD 16 billion
                                                      The project aims to transform the stand-alone airport and its
                                                       surrounding area into an integrated Aerotropolis connecting
                                                       business, manufacturing, meetings/exhibitions, residence and
                                                       leisure/entertainment, thus turning the airport city into a trade
                                                       hub in Asia
                                                      The land resumption process is undergoing and the project is
                                                       planned to be completed by 2023
                                                      Taiwan has 7 Free Trade Zones (FTZ) of 6 harbours and 1
                                                       airport that allow companies to do simple value-added
                                                       service at FTZ before exporting
                                                      IKEA Food uses Kaohsiung FTZ as its logistic hub in Asia
                                                       for its geographical location and cost competitiveness

SOURCE: TAOYUAN AEROTROPOLIS; TIPC

                                                                                                           28 JANUARY, 2019
KEY BUSINESS OPPORTUNITIES – TRANSPORT

SUPERIOR SERVICE AND STRONG BRAND RECOGNITION
KEY TO BUILDING SCANIA’S SUCCESS
       THE COMPANY                                                    KEY SUCCESS FACTORS

                                                                 LONG-TERM AND STRATEGIC COOPERATION WITH
                                                                 PARTNERS
                                                                  Scania works long-term and closely with local bodybuilder
                                                                   partners
                                                                 EXTENSIVE AFTER-SALES SERVICE NETWORK
  Scania is a world-leading provider of sustainable transport
   solutions for trucks and buses                                 Scania has the most extensive service network among
                                                                   European brands with 11 workshops in four different
                                                                   regions in Taiwan to serve their customers
                                                                 VALUE ADDED SERVICES TO CUSTOMERS
                                                                  Scania provides driver services like training and coaching
       THE CASE                                                    courses and financing credit service

  Griffin Automotive has been a 100% owned subsidiary of        STRONG BRAND IN TAIWAN
   Scania in Taiwan since December 23rd, 2005                     Scania has a long history in Taiwan since the distributor
                                                                   time and has built a strong brand name
  On the Taiwan market, Scania imports chassis and work
   with Taiwanese bodybuilder partners
  The company does not only sell new Scania trucks and            “It is important to follow the government’s policy direction. The
   buses but also provides maintenance and repair services        government’s incentives to scrap old trucks for air pollution drives
   and support                                                                        our market growth for 2017.“
  Scania has a leading position in trucks and coach buses
   markets with 15-20% of market share in Taiwan
                                                                                         Chen Fang Lee, Sustainability, Scania Taiwan
SOURCE. INTERVIEW

BUSINESS SWEDEN                                                                                                       28 JANUARY 2019    28
AGENDA

 Business Sweden in APAC and Taiwan

 Taiwan overview

 Key business opportunities for Swedish companies

  High-tech manufacturing
  Transport
  Healthcare
  Energy
  Retail and food

 Sweden in Taiwan

                                                     28 JANUARY, 2019
KEY BUSINESS OPPORTUNITIES – HEALTHCARE

TAIWAN HAS AN ATTRACTIVE HEALTHCARE MARKET
BUT WITH CERTAIN CHALLENGES
HEALTHCARE                                        AREAS OF OPPORTUNITY       KEY CONSIDERATIONS
 Taiwan has a well-developed healthcare
  system with universal health insurance
  coverage for its whole population of 23M              PHARMACEUTICALS           UNDERSTAND THE
 Taiwan has a high-quality healthcare                                            LOCAL REGULATION
  system which is in continuous need of                                           FOR REGISTRATION,
  niche and high-quality healthcare                     ASSISTIVE DEVICES/        REIMBURSEMENT
  solutions                                             IMPLANTS                  AND SALES
 The rapidly aging population is becoming a
  great financial burden on the healthcare
                                                                                  CONTROL PRODUCT
  system                                                INFECTION CONTROL         LICENSES TO REDUCE
 Increased costs within the total fixed budget                                   RISKS
  finance model is the biggest challenge for
  Taiwan’s healthcare system. Use of digital           CONNECTED
  technology is the trend to reduce cost and           HEALTHCARE                  CAREFULLY SELECT A
  to increase quality of care
                                                                                   SUITABLE PARTNER
 The great financial burden on the                                                WITH THE RIGHT
  healthcare system has led to slow                    DENTAL AND MEDICAL          CHANNELS IN TAIWAN
  reimbursement processes and lower                    COSMETICS
  reimbursement amounts for innovative
  medical devices and medicine

                                                                                           28 JANUARY, 2019
KEY BUSINESS OPPORTUNITIES – HEALTHCARE

ONE OF THE MOST DEVELOPED HEALTHCARE SYSTEMS
IN ASIA WITH UNIVERSAL INSURANCE COVERAGE
 INDUSTRY DATA                                                                                                                                                                        COMMENTS

 NO. OF HOSPITALS RANKING WORLD TOP 200, 2015                                                                                                                                          Taiwan’s National Health Insurance (NHI) is a government-
                                                                                                                                                                                        based single-payer system with coverage for its entire 23M
   93                                                                                                                                                                                   population
                                                                                                                                                                                       Medical expenditure hovers around 6% of national GDP
                   20
                                          10                      9                  9                    8                      4                     4                  4             (compare to Japan 11%, Sweden 11% and South Korea 7%)
                                                                                                                                                                                       Despite a low total budget, Taiwan still provides a high quality of
    US

                                           Canada

                                                                  Taiwan

                                                                                    China

                                                                                                                                 Japan

                                                                                                                                                                          France
                       Germany

                                                                                                          Switzerland

                                                                                                                                                       Sweden
                                                                                                                                                                                        healthcare, which is evident from Taiwan’s ranking as world
                                                                                                                                                                                        number 4th and Asia number one for number of hospitals
                                                                                                                                                                                        ranked among the world top 200
 DEMOGRAPHIC DATA BY YEAR AND AGE GROUP (million)
                                                                                                                                                                                       Keeping a sustainable system despite increases in cost and a
  25                                                                                                                                                                                    fixed budget model is the biggest challenge Taiwan’s healthcare
                                                                                                                                                                                        system is facing
  20
  15                                                                                                                                                                                   Taiwan is one of the fastest aging societies in the world which
  10
                                                                                                                                                                                        causes rapid increases in healthcare costs. In 2017, 14% of
                                                                                                                                                                                        elderly people amounted to about 40% of the total NHI cost
   5
   0                                                                                                                                                                                   ICT technologies like Cloud and Big Data are used to reduce
                                                                                                                                                                                        cost and to increase quality of care. For example, NHIA
                                   1965

                                                           1980

                                                                                   1995

                                                                                                                                                2030

                                                                                                                                                                       2045
         1950
                1955
                            1960

                                          1970
                                                    1975

                                                                     1985
                                                                            1990

                                                                                            2000
                                                                                                   2005
                                                                                                             2010
                                                                                                                        2015
                                                                                                                               2020
                                                                                                                                         2025

                                                                                                                                                       2035
                                                                                                                                                                2040

                                                                                                                                                                               2050

                                                                                                                                                                                        implemented a Medical Cloud system for prescription, diagnosis
                         0-14 years old                                15-64 years old                                  Above 65 years old                                              and images data sharing to reduce repeated medication and
                                                                                                                                                                                        diagnosis

THE TAIWANESE MARKET IS WELL DEVELOPED AND IN NEED OF NICHE AND HIGH-END MEDICAL PRODUCTS

SOURCE: RANKING WEB OF HOSPITALS; MINISTRY OF HEALTH AND WELFARE

                                                                                                                                                                                                                                            28 JANUARY, 2019
KEY BUSINESS OPPORTUNITIES – HEALTHCARE

TAIWAN RELIES ON IMPORT FOR HIGH-TECH MEDICAL
DEVICES AND MEDICINE
 INDUSTRY DATA                                                                    COMMENTS
 IMPORT OF MEDICAL DEVICE BY CATEGORIES, 2014-17                                   Taiwan relies on import of high-end medical devices
                                                                                    like imaging implants, orthopedics and new drugs
   1,000                                                                           The local biomedical industries focus on low- to middle-
                                                                          CAGR      end devices like blood pressure meters, contact lenses,
                                                        Patient Aids      +5.3%     powered wheel chairs and generic drugs etc.
     800
                                                                                   Foreign companies need to have a local entity or an
                                                        Orthopaedics &
                                                                                    assigned local agent to register products with the
                                                                          +4.8%
                                                        Prosthetics                 Taiwan FDA
     600
                                                                                     Taiwan has a risk-based medical device registration
                                                        Dental products   +3.8%
                                                                                      system with three classes
     400
                                                                                     After the registration is done, the companies can
                                                        Diagnostic        +4.4%       apply for reimbursement with NHIA
                                                        Imaging
     200                                                                           The great financial burden on the healthcare system
                                                        Consumables       +3.8%     has led to slow reimbursement processes and lower
                                                                                    reimbursements for innovative medical devices and
        0
              2014       2015       2016       2017
                                                                                    drugs

SOURCE: FITCHSOLUTION; MINISTRY OF HEALTH AND WELFARE

                                                                                                                               28 JANUARY, 2019
KEY BUSINESS OPPORTUNITIES – HEALTHCARE

ASTRAZENECA SUCCEEDS IN TAIWAN THROUGH CLOSE
COLLABORATION WITH LEADING LOCAL PARTNERS
       THE COMPANY                                                           KEY SUCCESS FACTORS

                                                                        STRONG R&D COLLABORATION WITH PARTNERS
                                                                         Collaboration with 75+ Taiwan medical societies and 37 research
                                                                          partners in Taiwan
  AstraZeneca is a global, science-led biopharmaceutical
   company that focuses on the discovery, development and                USD 45M+ clinical trial investment in Taiwan between 2013-18,
   commercialization of prescription medicines, primarily for the         number one in lung cancer clinical trials in Taiwan
   treatment of diseases in three therapy areas – 1. Oncology,          PURSUE TAIWANESE MEDICAL EXCELLENCE
   2. Cardiovascular, Renal & Metabolism and 3. Respiratory
                                                                         AstraZeneca collaborates with leading local partners to:
  AstraZeneca established its first Taiwan office in 1948                  Raise the standard of asthma care by supporting the launch of
                                                                             500 Asthma Centres of Excellence in 2018
       THE CASE                                                             Increase the rate of early diagnosis and treatment for diabetes
                                                                        SUPPORT TAIWANESE BIOMEDICAL INNOVATION
  Taiwan is the fourth biggest market for AstraZeneca in Asia
   thanks to Taiwan’s national health insurance (NHI) system with        Connect leading Taiwanese research with AstraZeneca’s strategic
   universal coverage, where each patient has access to a broad           R&D processes
   range of healthcare solutions. This creates a big market for          Support government’s flagship biomedical innovation efforts
   medical companies in Taiwan
                                                                              ”Taiwan has a developed healthcare system and a great
  Taiwan’s key challenge is making new medicine available for            biomedical R&D environment. By working with the very best local
   patients, particularly in the oncology field, due to the NHI being     doctors, hospitals, researchers and government departments, we
   limited by a fixed budget. The great financial burden makes it            succeed in bringing life-changing medicines to Taiwanese
   difficult to reimburse new medical solutions. This is also the                                     patients.”
   biggest challenge facing most medical companies on the
   Taiwanese market                                                               Simon Manners, Company President, AstraZeneca Taiwan
SOURCE. INTERVIEW

BUSINESS SWEDEN                                                                                                            28 JANUARY 2019   33
AGENDA

 Business Sweden in APAC and Taiwan

 Taiwan overview

 Key business opportunities for Swedish companies

  High-tech manufacturing
  Transport
  Healthcare
  Energy
  Retail and food

 Sweden in Taiwan

                                                     28 JANUARY, 2019
KEY BUSINESS OPPORTUNITIES - ENERGY

TAIWAN INVESTS IN GREEN ENERGY TRANSFORMATION
WITH KEY FOCUS ON WIND AND SOLAR
ENERGY                                       AREAS OF OPPORTUNITY                                   KEY CONSIDERATIONS
 Taiwan has the long term goal to phase
  out nuclear energy and an ambition move              SOLUTIONS AND                                            MAP THE
  toward 20% renewable energy by 2025                  CONSULTING SERVICE                                       STAKEHOLDERS AND
                                                       FOR NUCLEAR POWER                                        UNDERSTAND THE
 The total budget for the decommissioning
                                                       PLANT DECOMISSION                                        VALUE CHAIN
  of nuclear power plants amounts to USD
  2.3 billion and covers 6 reactors*                   OFFSHORE WIND                                            TARGET THE KEY
 The renewable energy is mainly solar                 POWER SUBSYSTEM,                                         DECISION-MAKERS BY
  power and offshore wind power                        CONSULTING                                               OWN PRESENCE OR
                                                       ENGINEERING, O&M                                         THROUGH PARTNERS
 5.5 GW of offshore wind power capacity
  has been awarded and is to be completed
                                                       OTHER RENEWABLE
  by 2025                                                                                                       FOLLOW
                                                       ENERGY, OCEAN
 The offshore wind power market has                   ENERGY, BIOGAS,                                          DEVELOPMENT OF
  attracted international developers like              WASTE TO ENERGY                                          GOVERNMENT PLAN
  Orsted, WPD, CIP and NPI to develop
  Taiwan’s offshore wind power market and
  position Taiwan as a hub for Asian                   ENERGY-SAVING                                             IMPORTANT TO
  offshore wind development                            EQUIPMENT AND                                             APPORACH
                                                       SOLUTIONS                                                 THE MARKET NOW!

                                               * DUE TO THE REFERENDUM IN NOVEMBER 2018, IT IS UNLIKELY THAT POWER PLANT 3 WILL BE DECOMMISSIONED BY 2025.

                                                                                                                                   28 JANUARY, 2019
KEY BUSINESS OPPORTUNITIES - ENERGY

TAIWAN HAS AMBITIOUS PLANS TO INCREASE
RENEWABLES TO 20% BY 2025
 INDUSTRY DATA                                                                        COMMENTS
 ENERGY STRUCTURE CHANGE FOR ELECTRICITY,                                              98% of energy is imported in Taiwan. Heavy reliance on
 2016 & 2025 SET BY BOE 2016, % *                                                       energy imports threatens Taiwan’s energy security and
                                                                                        increases risks
                                    2016      2025
                                                                                       Increasing local production of renewable energy is a
                                                                                        way to strengthen Taiwan’s energy security
        46%50%
                      36%                                                              The renewable energy is to be increased to 20% in
                         28%                                                            2025, mainly by solar and offshore wind power
                                                          20%
                                   12%                                                 The government has the ambition to phase out nuclear
                                         1%          5%         1% 1%
                                                                                        energy. Currently, Taiwan has 3 operating nuclear
          Gas        Coal & Oil    Nuclear      Renewables      Hydro                   power plants with 6 reactors, which account for 12% of
                                                                                        the total power production
 INITIALPLAN FOR DECOMMISSION OF NUCLEAR POWER                                         The plan for phasing out or decommissioning nuclear
 PLANTS*
                                                                                        power will be clarified during first half of 2019
  2 reactors per plant, the total budget is about 2.3 USD billion for                 The total decommission budget amounts to USD 2.3
   6 reactors
      Plant #1             Plant #2              Plant #3
                                                                                        billion for the 6 reactors
                                                                                       Also to control air pollution, Taiwan will reduce coal-
          2018-19                 2021-23                   2024-25                     based power plants and increase the use of natural gas
                                                                                        to 50%

ENERGY TRANSFORMATION CREATES OPPORTUNITIES IN NUCLEAR DECOMMISSIONING AND RENEWABLE ENERGY
                                                                * DUE TO THE REFERENDUM IN NOVEMBER 2018, IT IS UNLIKELY THAT POWER PLANT 3 WILL BE DECOMMISSIONED BY 2025. THERE
SOURCE: BUREAU OF ENERGY                                        ARE CURRENT DISCUSSION TO PROLONG THE LIFETIME OF BOTH REACTORS, WHICH WILL INFLUENCE THE ABOVE TIMELINE

                                                                                                                                                            28 JANUARY, 2019
KEY BUSINESS OPPORTUNITIES - ENERGY

INTERNATIONAL DEVELOPERS VIEW TAIWAN AS A HUB
FOR ASIAN OFFSHORE WIND DEVELOPMENT
 INDUSTRY DATA                                                              COMMENTS
 OFFSHORE WIND ACCUMULATETD DEVELOPMENT                                      The goal is to increase the percentage of renewable energy
 CAPACITY AND CONSTRUCTION PERIOD                                             from 5% to 20% by 2025, mainly through solar (20 GW) and
                                                                              offshore wind power (5.5 GW)
                                                                             Taiwan has a Renewable Energy Act in place and works with a
                                                        PHASE III
                                                                              Feed-in-Tariff system to promote renewable energy development
                                                        Deeper
                                       PHASE IIB        water zonal          5.5 GW of offshore wind power development capacity has been
                                       Zonal            application           awarded to 7 developers through 14 projects in 2018. The
                      PHASE IIA                                       TBA
                                       application by                         investment amount is estimated to be about USD 35 billion
                      Zonal            auction
   PHASE I            application by                                         The offshore wind power market has attracted international
                      selection                                               developers like Orsted, WPD, CIP and NPI to develop the
   Demo
                                                                              Taiwan offshore wind power market and position Taiwan as
                                             5.7 GW                           a hub for Asian offshore wind development
                                                                             Local content is required by the Phase IIA – Zonal Application by
                                                                              Selection process, meaning that developers are required to use
                            4 GW                                              local suppliers for part of its supply chain
         0.36 GW
                                                                             The guidance for the Phase III deeper water offshore wind
                                                                              development is to be announced in 2019
       2015-20             2018-25        2018-25             ?

IMPORTANT TO MAP OUT THE VALUE CHAIN IN ORDER TO IDENTIFY KEY STAKEHOLDERS TO APPROACH

SOURCE: BUREAU OF ENERGY

                                                                                                                               28 JANUARY, 2019
KEY BUSINESS OPPORTUNITIES – ENERGY

MINESTO INTENDS TO USE TAIWAN AS A BASE FOR
THEIR EAST ASIA EXPANSION
       THE COMPANY                                                        KEY SUCCESS STRATEGIES APPLIED

                                                                    LEVERAGE ON THE LOCAL R&D COMPETENCE AND FACILITY
                                                                    TO FURTHER DEVELOP THE TECHNOLOGY
                                                                     Established research cooperation with National Taiwan Ocean
  Minesto is a world-leading marine energy technology developer      University for local technology demonstration at test sites in
  Their award-winning patented product, a subsea kite technology     Keelung and ocean current sites in the Kuroshio current
   called Deep Green, is applicable in areas where no other known    Potential sites for commercial scale installation of the Deep Green
   technology can operate cost-efficiently                            technology will be further developed

                                                                    LEVERAGE ON LOCAL MANUFACTURE CAPABILITY FOR
                                                                    PRODUCT DEVELOPMENT AND EXPORT MARKET
       THE CASE
                                                                     Taiwanese suppliers are capable of supplying components like
  Taiwan is one of the few markets that has potential to harvest     foundations and cables to the system
   power from the Kuroshio current, a north-flowing ocean            Engage with potential component partners for product
   current on the west side of the North Pacific Ocean, a low-        development and long-term cooperation for export markets
   flow current
  Minesto decided to set up a subsidiary in Taiwan in 2018 as           “It is clear that ocean energy is needed to form a sustainable
   their first location outside Europe to develop the Deep Green      future energy mix in Taiwan. Our ambition is to be highly involved
   technology in Taiwan by establishing research cooperation         both in building substantial capacity for a predictable, clean energy
   with a local university                                            supply in Taiwan – and in shaping the country’s long-term energy
                                                                                                  policy agenda.“
  Minesto’s ambition is to use Taiwan as a base for their East
   Asia business and the commercial roll-out of the company’s
   technology in Asia                                                                         Martin Edlund, CEO, Minesto AB
SOURCE. INTERVIEW

BUSINESS SWEDEN                                                                                                           28 JANUARY 2019    38
AGENDA

 Business Sweden in APAC and Taiwan

 Taiwan overview

 Key business opportunities for Swedish companies

  High-tech manufacturing
  Transport
  Healthcare
  Energy
  Retail and food

 Sweden in Taiwan

                                                     28 JANUARY, 2019
KEY BUSINESS OPPORTUNITIES – RETAIL AND FOOD

STEADY GROWTH OF HOUSEHOLD DISPOSABLE INCOME
IN TAIWAN WITH AVERAGE AMOUNT OF USD 34K
 INDUSTRY DATA                                                                            COMMENTS
  ANNUAL HOUSEHOLD DISPOSABLE INCOME
  BY FIVE DIVISIONS, 2017 (USD), TOTAL HOUSEHOLDS = 8.5 M
                                                                                           The average annual disposable household income in
                                                                                            Taiwan is about USD 34K with a CAGR of 2% between
                                            A: 70K
                                                                                            2012-2017

                                            B:40K                                          The highest 20% of households has about USD 70K
                                                                                            in disposable income with a CAGR of 2.2% between
                                            C:30K
                                                                                            2012-2017
                                            D:20K
                                                                                           Taipei, Hsinchu, Taoyuan and Taichung are the four
                                            E:10K                                           cities ranked as having the highest household income
                                                                                            and expenditure
  HOUSEHOLD EXPENDITURE BY CATEGORIES                                                      Solid economic growth is anticipated to drive wage and
                         25% 24%                 2010                2017                   consumer income growth. On the negative side, an
                                                                                            aging population and potential headwinds in global
   17%16%
                                               14%15%                                       trade, upon which Taiwan is heavily reliant, might
                                                          13%13%               12%
                                                                     11%                    constrain discretionary spending growth
                                                                        10% 10%

              3% 3%                 3% 3%

    Food     Clothing   Housing Furniture      Health      T&C     RecreationRestaurant

THE HIGH PURCHASING POWER OF TAIWANESE CONSUMERS BRINGS OPPORTUNITIES FOR SWEDISH B2C COMPANIES

SOURCE: DIRECTOR GENERAL OF BUDGE, ACCOUNTING AND STATISTICS; IKEA WEBSITE

                                                                                                                                     28 JANUARY, 2019
KEY BUSINESS OPPORTUNITIES – RETAIL AND FOOD

TAIWANESE CONSUMERS’ ACCEPTANCE OF FOREIGN
BRANDS IS HIGH
 INDUSTRY DATA                                                                            COMMENTS
 POPULAR SWEDISH BRANDS IN TAIWAN                                                          Household expenditure on healthcare, restaurants, transport and
                                                                                            communication, furniture has increased between 2010 and 2017.
                                                                                            The expenditure on restaurants has seen the highest growth
                                                                                           Taiwan has the fourth-highest spending on dining out in the
                                                                                            Asia-Pacific region, trailing only South Korea, Australia and
                                                                                            Singapore, average spending is about USD 240 / month
                                                                                           Consumers’ acceptance of foreign brands is high. IKEA has
                                                                                            been in Taiwan for 20 years with 5 stores (the 6th one to be
                                                                                            opened in 2019) and H&M has opened their Asian flagship
                                                                                            store in Taipei

  NUMBER OF IKEA STORES PER 10M PEOPLE                                                     Swedish food, home appliance and furniture, outdoor gear,
   6                                                                                        clothing, baby products, consumer electronics etc. are popular
                                                                                            items
   5                              Strong purchasing power and openness to foreign
                                    brands makes Taiwan great for “middle class”           The Swedish food exports to Taiwan grew rapidly in recent years
   4                                            consumer products
                                                                                            with a CAGR of 44%, reaching SEK 195M in 2017. IKEA
   3
                                                                                            Taiwan has among the highest percentage of food sales as part
   2                                                                                        of total turnover globally.
   1
                                                                                           Taiwan has its own national standard called CNS. Consumer
   0                                                                                        products might require separate testing and certification
       Hong Kong Singapore   Taiwan    Japan   Malaysia   S. Korea   Thailand Indonesia

KEY TO LEVERAGE THE STRONG SWEDISH BRAND IMAGE OF GOOD DESIGN AND QUALITY

SOURCE: DIRECTOR GENERAL OF BUDGE, ACCOUNTING AND STATISTICS                              *TRANSPORTATION AND COMMUNICAT ION

                                                                                                                                             28 JANUARY, 2019
KEY BUSINESS OPPORTUNITIES – RETAIL AND FOOD

TAIWAN HAS AN BOOMING E-COMMERCE MARKET WITH
HIGH PENETRATION OF SOCIAL MEDIA
 INDUSTRY DATA                                              COMMENTS

                                                             Taiwan has the world’s third-highest rate of e-commerce
                                                              penetration (62%) after the US (66%) and the U.K. (77%)
                                                             The e-commerce market has grown at a rapid pace with a
                 EC Market Value           EC PENETRATION     market size of USD 37.6 billion in 2016 thanks to its well-
                 USD 38B                   62%                established infrastructure of distribution and payment
                                                              and high smartphone penetration
                                                             High penetration of social media with Facebook (77%),
                         Average Value    Annual EC Order     YouTube (75%) and LINE (Messenger app, 71%) which are
                         per order        1074M               used as major digital marketing channels
                         USD 40
                                                             Considering the ready infrastructure and high
                                                              penetration of e-commerce, Taiwan is an easier e-
                 Smartphone              Social Media         commerce market compared to many less developed Asian
                 Penetration             Penetration
                                                              markets
                 80%                     Over 70%
                                                             Taiwan is top 5 Google Play market by revenue (together
                                                              with Japan, US, S. Korea and UK). and Taiwan ranked
                                                              second in the Asian region for the percentage of time spent
                                                              playing mobile games per week

IMPORT TO CONSIDER OMNI CHANNEL SALES APPROACH WHEN ENTERING THE TAIWANESE B2C MARKET

SOURCE: CIC, TECH NEWS

                                                                                                           28 JANUARY, 2019
KEY BUSINESS OPPORTUNITIES – RETAIL AND FOOD

IKEA’S SUCCESS IN TAIWAN IS DRIVEN BY STRONG
BRAND, LOCAL ADAPTATION AND CHANNEL STRATEGY
       THE COMPANY                                                    KEY SUCCESS STRATEGIES APPLIED

                                                                STRONG BRAND PERCEPTION AND VALUE FOR MONEY
                                                                PROPOSITION
                                                                 Continuously invested in brand and lowering prices to drive higher
                                                                  volumes
  IKEA is a Swedish-founded multinational group that designs    Have been able to maintain a good quality perception
   and sells ready-to-assemble furniture, kitchen appliances
   and home accessories                                         LOCAL ADAPTATION
  IKEA is among the world's largest furniture retailers         Products developed specifically to meet Asian needs contribute to
                                                                  15% of total turnover. Contributed to 75% of total growth 2018
                                                                 Food menu adapted to local food culture. Highest share of food
                                                                  sales globally in 2018
       THE CASE
                                                                INTRODUCING E-COMMERCE AND NEW TOUCH POINT
  IKEA has been in Taiwan since 1994 and currently has
   national online sales coverage, 5 stores and 1 pick-up and    E-commerce national coverage since December 2017. E-
   order point in Taiwan                                          commerce now 4% of total revenue
                                                                 Pick up and order point in Hsinchu opened August 2016
  IKEA will open its 6th store in Taipei in 2019
  IKEA is the leading home furnishing company in Taiwan
   with a market share of around 7%                                 ”IKEA has over the last 24 years actively promoted Sweden and
                                                                   Swedish design in Taiwan and thanks to a well-implemeted concept
                                                                      been able to reach the hearts of the many people in Taiwan”.

                                                                              Hugo Asplund, Deputy General Manager, IKEA Taiwan
SOURCE. INTERVIEW

BUSINESS SWEDEN                                                                                                      28 JANUARY 2019   43
AGENDA

 Business Sweden in APAC and Taiwan

 Taiwan overview

 Key business opportunities for Swedish companies

 Sweden in Taiwan

                                                     28 JANUARY, 2019
SWEDEN IN TAIWAN

SWEDEN AND TAIWAN HAVE A STABLE TRADE
RELATIONSHIP WITH STRONG GROWTH SINCE 2013
EXPORT & IMPORT DEVELOPMENT MILLION SEK, SWEDEN & TAIWAN
 7000                                                                       Largest categories 2017:
                                Exports from Sweden   Imports from Taiwan
                                                                            1. Machinery and equipment
 6000                                                                       2. Metalworking
                                                                            3. Nails, pins, screws, bolts
                                                                            4. Transport & vehicles
 5000                                                                       5. Strollers, sporting goods,
                                                                               toys, games

 4000
                                                                            Largest categories 2017:
 3000                                                                       1. Transport & vehicles
                                                                            2. Machinery & equipment
                                                                            3. Iron & steel
 2000                                                                       4. Medicine & pharmaceuticals
                                                                            5. Pulp & paper

 1000

      0

SOURCE: SCB, KOMMERSKOLLEGIUM

                                                                                             28 JANUARY, 2019
SWEDEN IN TAIWAN

SWEDISH COMPANIES REPRESENT DIVERSE SECTORS
AND ARE PRIMARILY PRESENT TO SELL TO TAIWAN*
 INDUSTRIES REPRESENTED                                       OPERATIONS RESPONSIBILITY                                PURPOSE FOR PRESENCE
                                                              RESPONDENTS’ OFFICES IN TAIWAN ARE                       MAIN PURPOSE(S) FOR HAVING OPERATIONS
                                                              RESPONSIBLE FOR BUSINESS / OPERATIONS                    IN TAIWAN:
                                                              IN FOLLOWING COUNTRIES / REGIONS:
          28%                           20%
    Industrial Equipment                                                               4%                                                 5%
                                   Retail / Consumer                              4%                                              8%
        & Solutions                      Goods                               4%
                                                                        4%
                                                                      3%

          20%                           20%                                                                               26%
     Business Services                                              15%
                                     Automotive /
         / Banking                    Transport
                                                                                                                                                             61%
                                                                                                         66%

          10%                            4%
         Telecom /                      Energy
         Electronics
                                                                       Taiwan
                                                                                                                             Sell to the Taiwanese market
                                                                       Taiwan + APAC
                                                                       Taiwan + China, Japan, South Korea                    Sell to other markets
                                                                       Taiwan + China, Japan, Vietnam, USA
           4%                            4%                            Taiwan + China, Hong Kong                             Manufacture for other markets
      Travel Services              Pharma / Medical                    Taiwan + South Pacific (SEA, AU, NZ)
                                     Technology                                                                              Manufacture for the Taiwanese market
                                                                       Taiwan + Scandinavia

SOURCE: * DATA BASED ON SURVEY WITH 28 RESPONDENTS, THE SWEDISH CHAMBER OF COMMERCE TAIPEI’S BUSINESS CLIMATE SURVEY

                                                                                                                                                     28 JANUARY, 2019
SWEDEN IN TAIWAN

MORE THAN 80 SWEDISH COMPANIES ARE PRESENT IN
TAIWAN IN A RANGE OF SECTORS*
   MATERIAL&                                              ENERGY &                                                RETAIL /
                          TRANSPORT   ICT / SECURITY                                   HEALTHCARE
 MANUFACTURING                                          ENVIRONMENT                                              CONSUMER

A LARGE NUMBER OF SWEDISH COMPANIES ARE ALSO DOING BUSINESS THROUGH DISTRIBUTORS

SOURCE: BUSINESS SWEDEN                            * ONLY EXAMPLE OF SWEDISH COMPANIES WITH PRESENCE IN TAIWAN

                                                                                                                 28 JANUARY, 2019
2019 Business Sweden

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