Abstract

Within the Taiwanese software industry, the system integration and information security segments have the highest annual production value. Information security is currently the fastest growing segment, followed by embedded software.

The Taiwanese PC software industry's exports are forecast to rise from NT$37.8 billion in 2007 to NT$68.7 billion in 2010. Exports' share of total production value will rise from 17.3% in 2007 to 24.6% in 2010.

Taiwan's exports of embedded software are forecast to rise from NT$6.5 billion in 2007 to NT$10.6 billion in 2010. Exports' share of total embedded software production value will increase from 87.3% in 2007 to 89.8% in 2010.

The information security and embedded software segments of the Taiwanese software industry, where the emphasis is on product sales, are heavily export-oriented. For both of these industries, the potential exists to develop export sales to many different parts of the world. Service provision plays a much more important role in the system integration and commercial software segments, and software products tend to be highly customized to suit the IT application needs and usage habits of particular customers. As a result, growing export sales in these segments is a far more challenging task, and in the short term at least companies in these segments of the Taiwanese software industry will continue to focus mainly on the domestic market. In the information security segment, by contrast, the high level of standardization will enable service providers to continue focusing on the development of international markets.

Taiwan's information security software industry has developed into an export-oriented industry with products that are globally competitive; many Taiwanese information security products have already built up a strong international reputation. Embedded software is another area where Taiwanese firms are focusing on the global market, leveraging Taiwan's strength in IT hardware manufacturing to create synergy. Taiwan's system integrators enjoy significant competitive advantage in the rapidly growing Asia Pacific market; however, their operational and R&D capabilities still lag behind leading international companies. In the commercial software segment, Taiwanese software vendors' export growth will hinge on their ability to leverage their existing strengths in the development of software solutions tailored for the manufacturing industry or financial services providers. Selecting target markets which have a similar linguistic or cultural background to Taiwan, or which are geographically close to Taiwan, is also important to Taiwanese commercial software vendors' future growth.

Appendix

Research Scope

For the purposes of this report, the software industry is divided into the PC software and embedded software industries. The PC software industry can be further divided into software products and software services. Software products include basic software, commercial software, and entertainment software:

Software services include special project services and

Web services:

Embedded software is normally integrated into hardware products. It may be developed in-house by a hardware manufacturer, or supplied by a specialist embedded software vendor.

For the purposes of this report, production value is defined as the sum total of the annual revenue of all Taiwanese software companies. Taiwanese software companies include both domestic companies and the Taiwan-based subsidiaries of foreign companies. Production value is broken down into export sales and domestic sales.

List of Companies