Global R&D Innovation Partnership P rogram

1. Global R&D Innovation Partnership Program Department of Industrial Technology,MOEA

2. Introduction Purposes: Reaching out to multinational corporations that may find it mutually beneficial working with Taiwan’s enterprises, and encouraging them to invest in innovative R&D activities in Taiwan, thereby raising the level of all parties’ competitiveness. Co-developing a global R&D system in Taiwan with multinational enterprises, facilitating active cross-border cooperation, and bringingabout win-win results for all participants. Advancing Taiwan’s industrial ecosystem via cooperation with multinational companies, thereby creating multitudes of added value for the industry.

3. Engaging multinational enterprises to establish their R&D capabilities in Taiwan; Enhancing and expanding the global presence of Taiwan’s industrial supply chain Teaming up with multinational enterprises with mutually beneficial advantages Taking initiatives to attract inbound R&D capabilities from overseas Developing Taiwan to become an ideal partner in innovative R&D, industrial production and value creation Expanding R&D investment in Taiwan to facilitate the creation of new business Working with domestic enterprises to co-develop industrial ecosystem Establishing a link to global value-chain and advancing Taiwan’s industrial strength in order to generate new business opportunities

4. Promotion Strategies • Examining the development of Taiwan’s key industries to identify the technology gaps, and create new projects to amend the R&D shortfalls. • Identifying the owners of the key technologies and seeking to form collaboration relationship with • Aligning domestic enterprises to optimize Taiwan’s industrial chain • Identifying industries with distinct advantages to form supply chains to attract multinational companies • Integrating components companies along the supply chains to nurture the growth of domestic enterprises • Available incentives: • Government subsidies for foreign entities • Providing subsidies for domestic enterprise participants

5. Top-Down (Call forProposal) Think tankInternational collaborationprogram Research Institutesproposing priority industries/fieldsand targetcompanies for promotion The priority industries/fieldsconfirmed by the Department of IndustrialTechnology Public announcementof priority industries/fields Global R&D Innovation PartnershipProgram The goal is to link up with the global R&D systemsformed bymulti-national companies, and jointly engagein innovative R&D and valuecreating activities in Taiwan. Phase 1“R&D launching”: the recipients of the governmentsubsidy shall undertaketechnology R&D activities in Taiwan, proposesubsequent operatingplansand verify theirfeasibility. Phase 2 “Value creation ”: the recipients of the government subsidy shallestablish their ownindustrial chainsin Taiwan, increase inboundR&D investments, and contribute to the creationof new businesses, such as anew company, anew business unit, factory expansion or a joint venture with a domesticcompany.

6. Scope of DesignatedFields • The multi-national corporations that can benefit from workingwith Taiwanindustry are encouraged to plan and develop the innovative technologies within the scope designated by the MOEA (seeAppendix). Development guidelines: • Alpha-stagetechnologies which canpotentially be developed into strategic products, services, or industries in the future. • Technologies with the potentialto enable Taiwan to bring forth its own leading (flagship) technologies or greatly enhance Taiwan’s international competitiveness and industrial added value. • Carrying out R&D to develop keyenablingtechnologies,conducting vertical or horizontal technology integration to create the value for the respectiveindustrialchains.

7. Eligibility ofApplicants • Foreign corporation mayeither apply for this program by itself without any Taiwanese partners, or lead a consortium formed with Taiwanese companies to apply for the subsidy and implement the program. • Prerequisites: Foreign corporation: Applicant must have proved industrial R&D track records and has established a branch office in Taiwan in accordance with Taiwan law. A company established in Taiwan by foreign companies or research institutes with industrial R&D track record is eligible. The applicant must not have been an dishonored customer of any bank, and the company must maintain a positive balance for its net worth (shareholders equity). Domestic corporation: Domestic companies that have been registered inaccordancewith Taiwanlaw, including sole proprietorship and joint venture/company. It must not be an dishonored customer of any bank, and the company must maintaina positive balance for its net worth. • Domestic company may participate in Phase one application or apply later to join the “Value creationphase”.

8. Application/Review Processes【Phase 1—R&DPhase】 The applicants may present the project concept to the program office, as soon as the concept takes shape, todetermine ifthe projectwould be beneficial to both the applicant and the relevantindustry in Taiwan. A formal application is only due until after appropriate communications and discussions with theDOIT ofMOEA. Concept discussion • Submission of applicationdocuments. • Applicants may be askedto amend certain documents, or to provideadditional information. A formal meeting is then scheduled for the applicants to present the project to the reviewing committee. Application submission The applicant presentsconcept briefing in person(PPT file/40 minutes) which is followed by discussions with the reviewcommittee, where thoughts and ideas will be exchanged. Conceptreview • The initial proposal is required to be drafted according to the directives or suggestions from the concept review committee. Then it should be submitted within a prescribed timeframe. Applicant then await notification to attend the project review meeting. • The applicant should attendproject review meeting as scheduledto present the proposed planand answer questions from the committeemembers. Projectreview Eachproposal is subject to the final approval ofMOEA, at which time the amount of subsidy, as a percentage to the project budget, is determined. Projectapproval • Official audit is to be conducted towards the conclusion of the R&D phase, at which time the project proposal of value creation phase is tobe submitted. • As a matter of principle,the duration of Phase 1 should not exceed2years. • During the course of Phase 1, official audit is to be conducted annually. Contractsigning and implementation

9. Application/ReviewProcesses【Phase 2—ValueCreationPhase】 • The proposal of value creation phase should be submitted upon the completion of R&Dphase. • Attending the scheduledproject review meeting, applicant presents the proposaland answers questions from the members of the review committee. Projectreview The proposal is subject to the final review and approval of MOEA. The amount of the subsidy as a percentage to the project budget is determined by the Ministry when rendering its final approval. Project approval • As a matter of principle, the duration of Phase 2 should not exceed3years. • Phase 2 calls for the creation of new businesses, such asnew company, new businessunit, • factory expansion, or ajoint venture formed with domesticcompany. • Government audit is to be performed annually during the course of the project. Contract signing and implementation

10. R&DSubsidies • Items eligible forsubsidies: •  Salaries of R&Dpersonnel •  Consultantfees •  Foreign expertremuneration •  Travelexpenses • Expenses of consumable suppliesand rawmaterials •  Technology transfer fees, contractresearch fees, and verificationfees •  Overseas trainingexpenses •  R&D equipment usagefees •  R&D equipment maintenancefees • Budgetallocation: •  The amount of thesubsidy shouldnot exceed50% of eachproject’s totalbudget. The subsidy granted toeach participatingcompanyshouldnot exceed50% of the company’s budget allocated for the project. Any shortfallshould be funded by all the participants.

11. ProgramReview‘s Key Considerations • R&DPhase • Conceptreview: • Trackrecords of applicants‘ R&D activities and projects execution experience. • Feasibilityof the R&D team formation and how the tasks are assigned. • Extent of mutual benefits vis-à-vis industriesinTaiwan. • Feasibilityof R&D collaboration planned by the applicants and Taiwan’s industries/academia. • Feasibility of implementing programresult planned forTaiwan‘s industries. • Projectreview: • Feasibility of the R&D team formation and how the tasks are assigned, and the ability to integrate resources among multiple participating partiesto form theproject jointly. • Feasibility of the project, degree of control over key technologies, risk management skill, and adequacy of resources. • Appropriate topics and suitable partnersidentified forcontractresearch and technologytransfer. • Project timeline, implementation methods, target index set for technology, R&D topics, competitiveness analysis, anticipatedbenefits,and sufficiency of R&Dbudgeting. • Value CreationPhase • Feasibility of the R&D team formation andhow the tasks are assigned, andthe ability to integrateresources among multiple participating parties to form the application project jointly. • Feasibilityof project result applicationand the adequacyof resourceinvestment. • Viabilityof industrial supply chain to be formed(from R&Dto manufacturing). • Leading to major key impacts and benefits for Taiwan industries while driving the development of upstream and downstream of the industries. • Project timeline, implementation methods, target index set for technology, R&D topics, competitive analysis, anticipated impact, and sufficiency of R&Dbudgeting. • Level of activities among participating parties, cooperation schemes, and division of obligation and right. • Reasonablenessof the plan for the creation of newbusinesses.

12. Program ConsultationService DOIT ofMOEA Address: 4F., No. 51, Sec. 2, Chongqing SouthRoad, Taipei 10075, Taiwan,R.O.C. TEL:02-2394-6000 Ext:2566 Website:http://www.moea.gov.tw/Mns/doit Program Office of A+ Industrial Innovation R&D Program Address: 7F., No. 51, Sec. 2, Chongqing SouthRoad, Taipei 10075, Taiwan,R.O.C. TEL:02-2341-2314 Ext:2220 E-mail:yiin1104@iii.org.tw Website:http://aiip.tdp.org.tw

13. Appendix—Designated Fields • Next generation communication technologies: including B4G/5G backend networktechn ologies, B4G/5G test verification technologies, SDN/NFV technologies, and other next g eneration communicationtechnologies. • Optoelectronic /Electronic Materials: including semiconductor materials, packagingmate rials, LCD materials, touch panel materials ,and other optoelectronic/electronic materialr elatedtechnologies. • Kilowatt-class fiber laser: including excited semiconductor laser, high power gain/passiv e optic fiber, fiber laser collimating device, and other technologies related to KW gradeo ptic fiber lasersource. • Semiconductor manufacturing equipment: including semiconductor manufacturing equip ment tier2 technologies such as wafer stage, laser positioning feedback module, RF powe r module, impedance matching device, and other semiconductor equipment related techn ologies. • CPS digital manufacturing system: including product life cycle management, manufacturi ng system control platform technology, and other technologies related to CPS digital man ufacturingsystem. • High efficiency motor (higher than IE3): including motor design, manufacturing of keym aterials and components, automation technology, and other technologies related to highef ficiency motor (higher thanIE3). • Pharmacy: including new niche drug, medical R&D service technology, and otherpharm aceutical. • Medical instruments: including high-end medical imaging technology such as wearable minimally invasive display technology, high-end hemodialysis technology, MRIimaging technology, and other medical instrument relatedtechnologies.