Pevita Pearce
The Digital Economy and Technology Committee of the American Chamber of Commerce in Taiwan has issued a comprehensive set of recommendations aimed at fortifying the island’s technological infrastructure and regulatory environment. Commending the Taiwan government for its proactive stance, the Committee highlighted the 2025 launch of the Ten Major AI Infrastructure Projects and the introduction of the AI Basic Act as pivotal milestones in maintaining Taiwan’s global competitiveness. These initiatives, alongside a more structured investment in emerging fields such as quantum computing, represent a significant shift toward a long-term, strategic approach to national technology policy. However, the Committee emphasized that the resilience of Taiwan’s digital foundations remains a core national imperative, central to its security, economic stability, and public trust.
To transform these high-level ambitions into sustainable outcomes, the Committee argued that international collaboration and robust public-private partnerships are non-negotiable. As Taiwan navigates a period of rapid technological change and heightened geopolitical sensitivity, the adoption of risk-based regulatory approaches has been identified as a critical factor. Rather than relying on rigid, technology-specific mandates, the Committee advocates for frameworks that address actual security, privacy, and operational risks, thereby supporting innovation while strengthening the island’s long-term resilience.
Establishing Resilience-by-Design in Critical Digital Infrastructure
As digital technologies now underpin nearly every facet of essential public service—from social welfare administration and interbank settlements to healthcare delivery and national security—the reliability of IT systems has become a pillar of societal stability. The Committee recommends that the Taiwan government transition toward a "resilience-by-design" architecture. This approach moves beyond simple data backup to embed continuity, recoverability, and adaptability into the core design of national digital infrastructure.
While Taiwan has made significant strides in IT modernization over the last decade, the increasing complexity and interdependency of these systems have created new vulnerabilities. A disruption to these systems, whether through a sophisticated cyberattack, a geopolitical shock, or a major infrastructure failure, could trigger cascading economic and social consequences. To mitigate these risks, the Committee suggests a coordinated model supported by cross-ministerial collaboration and dedicated budget allocations to ensure that resilience is built into the system from the outset.
A key component of this strategy involves fostering cross-ministerial cooperation that extends beyond data backup. In recent years, Taiwan has successfully implemented backup mechanisms for many civilian and critical systems. However, the Committee notes that data availability does not equate to operational resilience if the core systems themselves cannot function during a prolonged disruption. By aligning resilience planning across ministries, Taiwan can avoid the fragmentation that often leads to systemic vulnerabilities.
Furthermore, the Committee emphasizes the need for practical implementation readiness through public-private engagement. Building resilient systems in sectors like finance and healthcare—where there is zero tolerance for downtime—requires more than just policy directives. The government is encouraged to initiate structured dialogues with trusted international technology partners who possess experience in large-scale continuity planning. These engagements should focus on creating deployable architectures and operational models, validated through joint drills, tabletop exercises, and cross-sector simulations. Such exercises are essential for identifying hidden dependencies and clarifying decision-making authorities before a crisis occurs.
Modernizing the Privacy Framework and Data Protection Act
In tandem with infrastructure resilience, the modernization of Taiwan’s privacy framework is seen as essential for fostering a digital economy. The Committee commended the Preparatory Office of the Personal Data Protection Commission (PDPC) for its 2026 draft amendments to the Regulations Regarding the Security Maintenance and Administration of Personal Information Files. However, industry experts caution that the current drafts include rigid mandates and quantitative thresholds that could inadvertently hinder innovation and drive up compliance costs without offering proportional improvements in privacy.
To align Taiwan with global standards such as the European Union’s General Data Protection Regulation (GDPR), the Committee proposed several key revisions. First, there is a call for a clear definition of Business Contact Information (BCI). By excluding information used solely for professional contact purposes—such as names, titles, and business emails—from the strictest personal data protections, Taiwan can streamline commercial operations while maintaining transparency.
The Committee also advocates for a risk-based "harm threshold" regarding breach notifications. Under this model, notification obligations would only be triggered if an incident poses a real risk to an individual’s rights and freedoms. Additionally, the recommended 72-hour reporting window should begin only when a breach is reasonably confirmed with sufficient detail, ensuring that notifications to the public and regulators are accurate and actionable rather than premature.
The transition from quantitative to qualitative definitions of "high-risk" entities is another priority. Currently, definitions often rely on data volume (e.g., 10,000 entries). The Committee suggests that the PDPC should instead focus on the nature of the processing activity, such as the use of sensitive data, large-scale profiling, or automated decision-making. By remaining technology-neutral and outcome-based, regulations can accommodate evolving security measures like multi-factor authentication and encryption without becoming obsolete as technology changes. Finally, a minimum 12-month transition period is recommended to allow organizations to adjust their internal policies and technical systems to new regulations.
Aligning ICT Procurement with Risk-Based Cybersecurity Standards
Cybersecurity remains a top priority for the Taiwan government, as evidenced by the 2025 amendment to the Cybersecurity Management Act (CSMA). However, the Committee pointed out a lingering inconsistency in public procurement practices. While the Ministry of Digital Affairs (MODA) has moved toward a risk-based review of products harmful to national cybersecurity, many government agencies still apply broad country-of-origin (COO) restrictions in their tendering processes.
In an era of software-defined hardware and globally distributed supply chains, the Committee argues that a product’s manufacturing location is an increasingly unreliable metric for assessing risk. A device’s security is often determined by who controls its code, its updates, and its data flows, rather than where it was assembled. The Committee urges the Public Construction Commission (PCC) to harmonize its procurement templates with MODA’s entity-based framework. This would involve moving away from blanket exclusions of products made in specific regions and instead focusing on banning specific "high-risk" brands or entities.
By adopting clearer, technical risk profiles, the government can reduce uncertainty for procuring agencies and ensure a more consistent application of security standards across all departments. The Committee also emphasized the importance of Good Regulatory Practices (GRP), specifically recommending a 60-day public consultation period for any major law amendments to allow for meaningful industry input.
Fostering a Robust Quantum Ecosystem and National Preparedness
Quantum computing is approaching a critical "inflection point," where quantum systems may soon outperform classical computers in specific, high-value tasks. This phenomenon, known as quantum advantage, could emerge sooner than previously anticipated. The Committee welcomed the launch of Taiwan’s Phase II Five-Year National Quantum Strategy (2027-2031), which focuses on hardware development and national research infrastructure.
However, the Committee suggests that hardware investment must be matched by efforts to accelerate quantum-enabled innovation in software and algorithms. A competitive national quantum program requires a thriving ecosystem that links research institutions, startups, and industrial users. For Taiwan, leveraging its existing strengths in semiconductor manufacturing is a solid start, but the real-world impact of quantum computing will be determined by how these systems are applied in priority domains.
International collaboration is viewed as a core pillar of this strategy. By engaging with global partners, Taiwan can rapidly develop talent and ensure its systems align with international standards and certification regimes. The Committee also recommends that the government provide targeted incentives for domestic industry players and emerging startups to invest in quantum applications, ensuring the long-term sustainability of the local ecosystem.
A critical aspect of quantum preparedness is the transition to quantum-safe cryptography. As quantum computers grow more powerful, they pose a systemic risk to existing encryption standards. The Committee urges the establishment of a unified, cross-agency task force—comprising authorities from digital affairs, finance, and national security—to oversee a national quantum-safe migration strategy. This migration should begin with "no-regret" actions, such as cryptographic asset discovery, followed by controlled pilot programs for critical infrastructure.
Advancing AI Policy through Continued Collaboration
Finally, the Committee expressed appreciation for the opportunities provided by MODA and the National Development Council to contribute to the development of the AI Basic Act. As the government continues to deliberate on risk classification frameworks and sector-specific guidelines for generative AI, the Committee stressed the importance of ongoing public-private dialogue.
Such collaboration allows technology providers to share international governance trends and industry insights, ensuring that Taiwan’s AI policies remain conducive to innovation while maintaining ethical standards. By fostering a responsible AI governance model, Taiwan can enhance its position as a global leader in the AI revolution, driving economic growth and societal progress in the years to come.
Timeline of Key Technological Policy Milestones in Taiwan
- 2024: Initiation of the AI Basic Act drafting process and preliminary risk framework discussions.
- 2025: Official announcement of the "Ten Major AI Infrastructure Projects"; Amendment of the Cybersecurity Management Act.
- 2026: Target implementation for the updated Regulations Regarding the Security Maintenance and Administration of Personal Information Files.
- 2027: Commencement of the Phase II Five-Year National Quantum Strategy (2027-2031).
- 2030-2031: Projected full-scale migration of critical business functions to quantum-safe cryptographic standards.
Analysis of Implications
The recommendations provided by the Committee reflect a broader shift in the global technological landscape, where "security" and "innovation" are no longer viewed as competing interests but as mutually reinforcing goals. For Taiwan, the move toward a resilience-by-design architecture is particularly vital given its unique geopolitical position. By embedding security into the fabric of its digital systems, Taiwan not only protects its own citizens but also solidifies its role as a "trusted node" in the global supply chain.
The emphasis on risk-based regulation over rigid mandates is also a strategic move to attract international investment. Global tech firms are more likely to commit resources to a market where regulations are predictable, aligned with international standards (like GDPR), and focused on actual harm rather than bureaucratic thresholds. As Taiwan seeks to diversify its economy beyond hardware manufacturing into software, AI services, and quantum applications, these regulatory refinements will be the deciding factor in its success.
Dwi Wanna
Ali Ikhwan
