Feature · 10 November 2026
Taiwan Writes AI and Chips Into Law, Budgets and the Grid
Ministries are tying artificial intelligence and semiconductors to statute, spending plans, the tax code and power supply at the same time.
Taiwan's government is now funding artificial intelligence as national infrastructure, and the clearest sign is a budget line. The proposed 2027 budget sets aside TWD 40.6 billion for the Ten Major AI Infrastructure Initiatives, up 25.3 percent from a 2026 baseline of TWD 32.4 billion, according to BowerGroupAsia's reading of the proposal. The total spans the general budget, special budgets and government funds, and it overlaps with a wider technology allocation of TWD 182.3 billion. 6
Behind the money sits a law. The Artificial Intelligence Basic Act was promulgated on January 14, 2026. It names the National Science and Technology Council as the central competent authority and says its aim is to promote human-centric research, development and industrial advancement while safeguarding fundamental rights. Among its principles, AI outputs are to carry appropriate disclosures or labels so that risks can be assessed. 3
Chips get a separate and longer commitment. After a Cabinet meeting in September, spokesperson Michelle Lee said the government plans to invest NT$300 billion (US$9.51 billion) through 2033 in areas including next-generation chip design and advanced processes. She quoted Premier Cho Jung-tai as saying Taiwan must keep investing in research and in high-level talent. Peter Hong of the National Science and Technology Council described two projects under the chip-based industrial innovation programme, running from 2024 to 2028. Seven university semiconductor institutes will receive equipment subsidies, and the Industrial Technology Research Institute will build a pilot line for startups and smaller firms. On design software, Hong said such tools have traditionally been "in the hands of a few major international companies", but called tools for advanced packaging "a very good opportunity" for Taiwan. 2
Companies, meanwhile, carry part of the cost through the tax code. Under the Statute for Industrial Innovation, research and development credits are available for up to 15% of qualified expenses, with the credit capped at 30% of the tax payable for the year in which the expenses were incurred, PwC's tax summary says. 4 The statistics office reported that semiconductor equipment imports rose 35.66 percent in the third quarter from a year earlier. 7
Factories and data centres need electricity, and Taipower has begun to say how it will supply it. Chairman Tseng Wen-sheng said the utility plans direct lines from power plants to AI data centres, which would manage the lines themselves. "The most stable way to supply electricity is to locate as close to the power source as possible," he said, citing links from the Datan plant to the Taoyuan Aerotropolis and from Tunghsiao to the Hsinchu Science Park. 9 The demand is still building: Taiwan Business TOPICS counts 22 commercial and enterprise data centres in operation, with an estimated five to eight major sites under construction or active planning. 8 BowerGroupAsia noted that a proposed Taipower subsidy of TWD 71.1 billion could ease pressure for higher electricity rates. 6
The calendar now runs through the legislature. President William Lai has also proposed a NT$10,000 cash payment for every citizen, framed as an "AI dividend". An Executive Yuan official said it could be paid before the Lunar New Year if the 2027 budget clears its third reading by the end of this year. 1 The chip programme's research projects continue to 2028, and its investment plan runs to 2033. 2
Sources: 1. Lai announces NT$10,000 cash handout - Taipei Times · 2. Taiwan steps up chip R&D, homegrown design software - Focus Taiwan · 3. NSTC -Content · 4. Taiwan - Corporate - Tax credits and incentives · 6. Taiwan Expands AI Adoption and Supply Chain Investment in 2027 Budget | BowerGroupAsia · 7. Taiwan Q3 GDP growth hits 14.36%, highest in 48 years - Focus Taiwan · 8. Bracing for Impact: Taiwan Prepares for Data Center Expansion - Taiwan Business TOPICS · 9. Taipower planning for AI power demand - Taipei Times
