Taiwan's government is drawing up its largest-ever technology budget for 2027, accelerating efforts to strengthen competitiveness in artificial intelligence (AI) and semiconductors. It is putting the build-out of “sovereign AI” computing infrastructure at the centre of the plan and is expanding national-level investment to respond to global AI competition and geopolitical risks.

IT Home, a Taiwanese IT media outlet, reported on Aug. 5 local time that the Executive Yuan set the 2027 technology budget excluding defence at 182.3 billion Taiwan dollars (about 8 trillion won). That is up 15.8 billion Taiwan dollars, or 9.47 percent, from about 166.5 billion Taiwan dollars (about 7.3 trillion won) this year, and is the highest level on record.

AI and advanced computing infrastructure are at the heart of the expansion. Taiwan plans to push ahead in earnest with its Smart Nation 2.0 policy to secure domestic AI computing capacity and accelerate digital transformation across industry as global AI competition intensifies. It will expand the use of AI across government governance, manufacturing, services and everyday life, and will actively support AI adoption by small and micro businesses.

The National Science and Technology Council presented “building Smart Nation 2.0” as a key task of the 2027 technology budget. The largest areas of new investment are securing sovereign AI computing capability and building basic AI infrastructure. Taiwan aims to secure its own AI computing capacity while also leveraging its strengths in semiconductors and AI hardware to raise industrial competitiveness.

Wu Chengwen (우청원), a political affairs minister at the Executive Yuan and head of the National Science and Technology Council, said, “Taiwan already has competitiveness in the semiconductor and AI hardware industries, but international competition is becoming even fiercer.” He said Taiwan must maintain its advantage in semiconductors and AI while promoting industrial upgrading and innovation based on science and technology.

Smart Nation 2.0, which begins in 2027, is a national project 추진 jointly by central and local governments. The goal is to improve administrative efficiency and encourage companies' digital transformation by actively introducing AI into public administration and industrial sites. Over the longer term, it also seeks to build a smart society by spreading AI services across all aspects of citizens’ lives.

Beyond AI, investment in next-generation strategic technologies will also rise sharply. The government’s “New AI Top 10 Infrastructure Projects” includes high-performance computing (HPC), quantum technology, smart robots, silicon photonics, optical communications and sovereign AI as key areas. It said the spending is aimed at taking the lead in next-generation technology industries.

Efforts to strengthen semiconductor competitiveness will continue. Taiwan’s biggest technology project, Jingchuang Taiwan, will receive 20.7 billion Taiwan dollars (about 901 billion won) in 2027. The plan is to maintain global semiconductor competitiveness by supporting advanced processes and advanced packaging, semiconductor materials and equipment, and innovation in applied technologies.

It will also invest 10.8 billion Taiwan dollars (about 475 billion won) in net-zero technologies to support carbon-neutral technologies and the creation of demonstration environments. A “New Southern Silicon Valley” to foster AI and semiconductor industries in the south will be allocated 8.4 billion Taiwan dollars (about 370 billion won).

Investment in space and communications will also expand. A third phase of the Space Programme will be allocated 6.9 billion Taiwan dollars (about 303 billion won) to support development of low-Earth-orbit satellites and remote-sensing satellites. Next-generation communications technology will receive 4.4 billion Taiwan dollars (about 194 billion won) to secure 6G and low-Earth-orbit satellite communications technology. Smart robots, marine technology and senior-friendly technology were also included as major investment areas.

The National Science and Technology Council said it would continue to expand support for basic science research, as well as large national projects. It said it is important to maintain long-term research and development capacity even if budgets are concentrated on large policy programmes.

The budget proposal shows the Taiwan government is shifting its policy focus beyond its existing semiconductor-centred industrial strategy to simultaneously strengthen AI computing infrastructure and systems for AI use in the public and industrial sectors. An assessment has emerged that Taiwan’s strategy to respond to global competition for technological supremacy by making AI and semiconductors the key pillars of national competitiveness has been fully reflected in the 2027 budget.