Apart from causing human tragedy, the Japanese earthquake and tsunami on 11 March 2011 and the floods in Thailand later that year were a test of the global technology supply chain. That supply chain turned out to be vulnerable to local events, which in turn has made having backup manufacturing infrastructure much more valuable. Now Taiwan is positioning itself to become a major backup production base for Japanese firms involved in the electronics supply chain.
In 2011, the Taiwanese government assisted 25 investment deals involving Japanese firms valued at NT$107.9 billion (US $3.66 billion), and the government projects many more in 2012. It’s quite a turnaround. Japan accounted for one-third of foreign direct investment in Taiwan in the 1980s, but its investments dropped to 11 percent over the past decade.