The amendments to a budget law could undercut Taiwan’s artificial intelligence (AI) and technology development projects with global tech giants, the Ministry of Economic Affairs said yesterday.
After the amendments to the Act Governing the Allocation of Government Revenues and Expenditures (財政收支劃分法) passed the legislature on Friday, the ministry expects a budget deficit of NT$30 billion (US$918.3 million), including NT$11.6 billion in technology research subsidies, Minister of Economic Affairs J.W. Kuo (郭智輝) told a media briefing.
That would affect the ministry’s collaboration with the world’s major semiconductor companies, including Nvidia Corp, Advanced Micro Devices Inc (AMD), Micron Technology Inc, ASML Holding NV, Lam Research Corp and Synopsys Inc to bring new technologies to Taiwan, Kuo said.
Photo: Liao Chia-ning, Taipei Times
Micron plans to produce high-bandwidth memory chips at its Taiwan site, while Nvidia and AMD would set up new research and development (R&D) centers in the nation, Department of Industrial Technology Director-General Chiou Chyou-huey (邱求慧) said.
Such collaborations are essential parts of AI development in Taiwan, he said.
Those projects rely on years of research and technology deployment, and a lack of government budget could delay their progress, Chiou said.
The ministry has granted Nvidia NT$6.7 billion in subsidies for its AI innovation center in Taiwan from 2022 to 2027, while AMD is to receive NT$3.31 billion in subsidies for its new R&D center, the ministry said.
Nvidia and AMD are major customers of Taiwan Semiconductor Manufacturing Co (台積電), while Lam Research and ASML are key equipment suppliers to it.
Taiwan could risk damaging its reputation and losing its appeal to foreign investors if it cannot honor the contracts signed with foreign firms, Chiou said.
The ministry said that its efforts to support an F16 jet maintenance center, a space industry development program, and 6G industry and talent cultivation programs could be affected negatively.
The new government fund allocation rules would lead to allocation of NT$10 billion for a public construction budget and NT$7.44 billion in general spending, it said.
To cope with budget cuts, local governments should shoulder the responsibility of building flood prevention systems, water supply systems spanning administrative regions, as the ministry can no longer afford those expenses, it said.
Micro, small and medium-sized businesses would also face a lack of subsidies, it added.
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