CENS Publications | Taiwan Industry Updates | My CENS | Inquiry Cart

The Economic Roundup is an excerpted translation of the Chinese-language ROC Economic Yearbook published by the Economic Daily News, a sister publication of the Taiwan Economic News. The yearbook is the most comprehensive and authoritative source for understanding the fundamentals of Taiwan's economy, both in the macro and micro aspects. The excerpted translation gives foreign readers a concise view of the island's overall economic picture. It is divided into four parts: general economy, primary industries, secondary industries, and tertiary industries.
 
 Tertiary Industry > Information Software Industry
Due to the effect of the general environment, rapid technological and product changes in the information technology market, and large-scale M&A (merger and acquisition) in the information industry, IT spending by enterprises was unstable and in 2005 the global IT spending by enterprises rose only 7.8%, lower than 2004, to US$2.7 trillion. Compound average growth rate (CAGR) for global IT spending by enterprises is expected to reach 5% during the 2004-2009 period and hit US$3.2 trillion in 2009.

According to the study of the Statistics Department, under the Ministry of Economic Affairs, total revenue of the Taiwanese computer system design industry and data processing/information provision service industry reached NT$209.2 billion in 2004 and around NT$206.75 billion in 2005. According to the study of the Market Intelligence Center of the Institute for Information Industry, exports of the Taiwanese information software industry reached NT$24.98 billion in 2004 and about NT$26.15 billion in 2005. Exports accounted for 11.9% of the total revenue in 2004, which increased to 12.6% in 2005 and is expected to top 13% in 2006.

Among various sectors, information security products and services boast the highest extent of market concentration, with the three leading companies accounting for 43% of the total revenue of the line. Multimedia products ranked second place, with the three leading firms accounting for 36% of the total revenue of the line. Commercial software and Internet services have lesser extent of market concentration, with their leading three firms accounting fro 32% and 31% of total revenues, respectively. Due to fixed marginal costs and the need of massive input of professional manpower, professional services cannot duplicate and spread rapidly and therefore, firms in the line focus on their respective niche application fields, driving down the extend of market concentration, with the three leading firms accounting for 24% of the total revenue.

The global information software market reached US$608.1 billion in scale in 2004, up 6.7% over 2003 and is expected to growth 5.1% further in 2005. The largest segment was system development and integration, followed by information-technology management and commercial-process management. Commercial-process management enjoyed 10.1% growth, the highest, followed by information-technology management with 8.7%. Compared with outsourcing services or system-integration services, the market for hardware maintenance and support has become quite mature and its business growth is further restricted by the fixed cycling timeframe for hardware upgrading and software renovation by businesses.

The capacity of Taiwan's information software market hit NT$157.6 billion in 2004, 5.1% more than 2003, including NT$46.8 billion for Internet services, up 11.5%, NT$44.6 billion for business projects, up 3.9%, and NT$66.2 billion for software products, up 1.7%. Although software products remained the largest segment, its further growth is limited, as businesses are putting their focus on integration of existing information systems, rather than installing new applications. By comparison, Internet services possess high growth potential, thanks to broadband connections, on-ling shopping and on-line entertainment. Meanwhile, major driving forces for the growth of the business projects market are the government policy (promoting the enlargement and internationalization of information service businesses), electronics government, information security, demand of system integration by businesses, and the business opportunities deriving from the mergers of financial holding firms.

   
FAQ | Biz Partners | Site Map | Contact Us | Copyright
 ©1995-2006 Copyright China Economic News Service All Rights Reserved.