Taiwan Business Quick Take – Taipei Times

• Staff writer, with agencies

TAXATION

Cabinet to review R&D perk

The Cabinet is today expected to review an amendment to the Statute for Industrial Innovation (產業創新條例) to provide higher tax incentives for local high-tech companies’ research and development (R&D), said officials at the Ministry of Economic Affairs, which drafted the amendment. Under the proposal, high-tech companies would be eligible for a tax credit of 25 percent for R&D expenses, compared with the current 15 percent. The 5 percent tax credit on overall new equipment spending would remain unchanged, the officials said. Once the Cabinet approves the amendment, it would be sent to the legislature for review. If passed, the measures would benefit major semiconductor companies such as Taiwan Semiconductor Manufacturing Co (台積電) and MediaTek Inc (聯發科), the officials said. The tax credit would help strategically important local industries enhance their competitiveness in global supply chains and help Taiwan keep up with incentives offered in other countries, the ministry said.

ELECTRONICS

Genesis Photonics closes

Taiwanese LED manufacturer Genesis Photonics Inc (新世紀光電) shut down yesterday, citing operating difficulties and poor financial conditions. As part of the full-scale closure, the company’s 260 employees and managers would be dismissed, Genesis said in a regulatory filing on Tuesday. It is filing for bankruptcy with the Tainan District Court, it said. The company has sustained operating losses over the past 10 years due to a price war with competitors in the Chinese LED sector, Genesis said. COVID-19 restrictions in China, global inflation and the slowdown in end-market demand added more pressure to the company’s operations this year, it added.

ELECTRONICS

Apple shipments stumble

Apple Inc’s most in-demand iPhones this year, the premium Pro models, are expected to fall short of earlier shipment estimates by 6 million units, due to a disruption at their main assembly hub in China, Morgan Stanley said in a note. Assemblers of the iPhone are now expected to ship 79 million units this quarter, analysts led by Sharon Shih (施曉娟) wrote earlier this week. The shortfall from the previous 85 million unit estimate is due to the iPhone 14 Pro and 14 Pro Max, assembled at the Zhengzhou facility in central China, being hit by a surprise week-long lockdown after a COVID-19 outbreak. “The wait time for 14 Pro/Pro Max has extended to four to five weeks as of late versus two to four weeks a month ago, implying demand stays healthy, even with supply gap,” Shih and her colleagues wrote.

SEMICONDUCTORS

BYD abandons IPO plan

Chinese automaker BYD Co (比亞迪) on Tuesday said it had scrapped plans for an initial public offering (IPO) of its semiconductor unit in China, saying a move to increase investments in wafer production would significantly affect the unit’s asset structure. “BYD Semiconductor intends to seize the time window to make large-scale investment in wafer production capacity,” BYD said in a filing with the Shenzhen Stock Exchange, adding that current wafer supplies were more than enough to meet demand amid rapid growth in electric vehicle manufacturing. Scrapping the listing would not have an adverse material effect on the company’s operations or the group’s development strategies, the automaker added.