A Second Sacred Mountain? Taiwan Biotech's Opportunity and Its Ceiling

Before talking about a sacred mountain, talk about size. In 2024, Taiwan's semiconductor industry (IC design, manufacturing and packaging/testing combined) crossed the NT$5 trillion mark in output value for the first time, reaching NT$5.3151 trillion, up 22.4% year on year, with 2025 estimated to reach as much as NT$6.18 trillion ^[1]. How tall is this mountain? This single industry alone accounts for roughly one-fifth of Taiwan's GDP.

Now look at biotech. In 2024, the revenue of Taiwan's entire biotech industry — and this is already the "broad definition," lumping together pharmaceuticals, medical devices, applied biotech, regenerative and digital medicine, and health and wellness — came to about NT$775.4 billion, up just 2.32% year on year ^[2]. If you count only the three core fields of "pharmaceuticals, medical devices, and applied biotech," revenue was about NT$413.3 billion, across 2,276 companies employing roughly 103,000 people ^[3].

Put the numbers side by side, and the gap is obvious at a glance: semiconductors' NT$5.3 trillion against biotech's broad-definition NT$0.78 trillion is a gap of about 6.9 times; against the core three fields' NT$0.41 trillion, it's about 12.9 times. This is not a gap that is "about to close" — it is an entire order of magnitude. "A second sacred mountain" is, at this moment, a policy vision, not an already-grown fact — and that is a hard truth that needs to be stated up front, or every discussion that follows will be built on inflated expectations.

This does not mean biotech isn't worth pursuing. A nation's economy shouldn't rest its bets on a single mountain — however strong semiconductors remain, a second and third pillar are still needed to spread the risk. The only issue is this: don't use a word like "sacred mountain," which misleads resource allocation and public expectations, to dress up a grove of trees that has only just been planted.

If biotech really were a sacred mountain on the rise, the capital markets should be the first to smell it coming. But the reality is the opposite.

The combined market capitalization of Taiwan's listed, OTC and emerging-market biotech and medical companies has surpassed NT$1.6 trillion ^[2]. That doesn't look small at first glance, but put it next to revenue and the truth comes out: market cap of NT$1.6 trillion against revenue of NT$0.78 trillion leaves biotech's P/S ratio (market cap divided by revenue) at just 2.07 times in 2024, barely keeping pace with the manufacturing-sector average — and back in 2018, that same figure was still close to 9 times ^[4]. A valuation cut in half, and then in half again, over six years — that is the body temperature of a "winter," not of a "sacred mountain."

What's even more glaring is the underlying health of the sector. As of August 2025, among listed, OTC and emerging-market biotech and medical companies, roughly 60 had net worth below par value, a share of 24.34% ^[11]. One company in every four trading below face value — an awkward signal for an industry that people are hoping will become a national sacred mountain. Even Minister of Economic Affairs Kung Ming-hsin has said plainly that, set against a market cap of NT$1.6 trillion, biotech's revenue shows a clear gap between output value and market value, and that companies should actively expand their scale of operations and grow real output value ^[2].

When even the regulator is warning that "market value can't support the output value it should," that is precisely the point: Taiwan biotech's problem is not that the market refuses to pay a premium for the dream — it's that the dream hasn't yet been converted into profit and loss. Semiconductors' market capitalization was built up out of real, hard cash profits; if biotech wants to be a sacred mountain, it has to make up this lesson first.

Break biotech apart, and not every sub-sector has the same underlying strength. The one most favored, and closest to a track Taiwan already knows well, is CDMO — the biotech version of "contract manufacturing."

The logic here suits Taiwan's appetite well. The global CDMO market was worth about US$120 billion in 2018, has already reached about US$190 billion in 2024, and is estimated to reach as much as US$290 billion by 2030 ^[6]. Even more critical is the geopolitical dividend: the US BIOSECURE Act would ban federal funding from flowing to specific Chinese CXO companies, pushing multinational drugmakers to "de-risk from China" and look for other manufacturing partners ^[6]. Taiwan, with its PIC/S GMP alignment with European and American regulations and high political trust, is seen as one of the top choices for "friend-shored" outsourcing.

Taiwan already has a compelling model. Bora Pharmaceuticals posted 2024 revenue of NT$19.25 billion, up 35.5% year on year, and has earned more than three times its paid-in capital in profit for two consecutive years; of that, CDMO business contributed about NT$7 billion, or 38% of revenue, and the company completed its core North American footprint (sterile injectable plants in Minnesota and Maryland), while also acquiring a rare-disease drug developer in New Jersey ^[5]. Tanvex, Mycenax, TaiBaCo and others each hold their own contract-manufacturing niches in antibodies and cell therapy.

But don't celebrate too soon. China's WuXi group, among the world's leading CDMO players, earns roughly US$3.6 billion from its US business alone — about 65% of its total revenue ^[6] — a scale still several times larger than Taiwan's players. Bora's CDMO business, at roughly NT$7 billion a year (a bit over US$200 million), is a chaser worth being proud of, not the leader of the pack. And the other side of this dividend is that it partly depends on the US-China rivalry continuing: if the legislation changes, or drugmakers conclude after all that they still can't do without China's cost structure and capacity, order transfers may not materialize as expected. This is an opportunity, but not a guarantee — and it is exactly the point where the East and West red teams clashed in our panel discussion: is de-risking from China a structural long-term trend, or a short-term dividend hanging on a single piece of legislation? The answer lands at "medium confidence."

If scale is the external ceiling, then National Health Insurance drug pricing is an internal wall Taiwan has built for itself.

Taiwan's National Health Insurance is a world-class achievement, but it has long kept drug prices at a level low by global standards. The cost is now surfacing: over the past decade, 13 originator drugs have withdrawn from the Taiwanese market one after another ^[7]. Supply resilience is also fragile — the Ministry of Health and Welfare has admitted that the domestic usage rate for active pharmaceutical ingredients is only 16.8%, and about 64% of essential medicines rely on imports ^[9]; in 2023, Taiwan's pharmaceutical trade deficit even reached roughly US$4.8 billion ^[9].

This is a real dilemma with no elegant solution. Keeping drug prices low lets the public's medical burden stay manageable, so everyone can afford to see a doctor; but that same move also thins out domestic drugmakers' profits, drives away originator drugs, and weakens the incentive for industrial expansion and supply self-sufficiency. A domestic market that can't even fatten up its own drugmakers, let alone keep originator drugs around, is missing a foundational piece from the start if it wants to serve as the backing for a biotech sacred mountain.

The government has not been idle. The Executive Yuan has approved a "National Pharmaceutical Resilience Program," investing NT$24 billion over four years, with the goal of achieving domestic production for at least 50 critical drugs and establishing a national-level drug stockpile center ^[9]. The revised Biotech and Pharmaceutical Industry Development Act also brings regenerative medicine, precision medicine, digital medicine and CDMO all under its incentives, with R&D spending eligible for tax credits of up to 25% ^[10]. The direction is right, but this is an infrastructure-repair project, not a magic spell that builds a mountain overnight — its effectiveness will have to be judged by the numbers several years from now.

Talking about a sacred mountain cannot avoid the hardest wall of all: getting an original new drug onto the international stage and past the FDA.

This path is, by nature, "high-risk, high-investment, low success-rate," and success rates in recent years have not visibly improved despite technological advances like gene editing and cell therapy ^[11]. But Taiwan has not turned in a blank paper. PharmaEssentia's drug Ropeg has already been approved in nearly 50 countries worldwide for polycythemia vera; at the end of 2025, its new indication for essential thrombocythemia (ET) formally entered substantive FDA review, with a target review date of August 30, 2026, giving it a chance to become the first new drug approved by the FDA for ET in nearly 30 years ^[8].

This is a remarkable achievement, proof that Taiwan "can" produce internationally competitive new drugs. But to be honest about it: this is an isolated breakthrough, not a systemic capability. One or two star drugs cannot hold up an entire sacred mountain — semiconductors' irreplaceability was built out of decades of depth, an entire supply chain, and thousands of companies; biotech, for now, is still just a few unusually tall trees, and the forest has not yet formed.

So where does Taiwan's real winning chance lie? The answer most people favor is stacking two strengths together — "electronics plus biomedicine."

Taiwan has some of the world's strongest ICT hardware capabilities and AI momentum. Electronics giants like Foxconn (its "M" business group), Quanta (BU12), Wistron and Inventec have all moved into medical AI and smart medical devices in recent years ^[12]; at COMPUTEX 2026, these companies pushed the "physical AI" front line directly into hospitals and homes ^[12]. The Ministry of Economic Affairs' medical-device strategy of "leading with software, carrying the hardware" and prioritizing home-based care ^[2] is precisely an attempt to use Taiwan's strongest software-hardware integration to carve out a niche that others find hard to replicate.

The appeal of this path is that it doesn't require competing with the global pharma giants in the money-burning marathon of new-drug development — instead, it plays to what Taiwan does best, "integration and manufacturing." But it has its own ceiling too: the scale of medical devices and digital medicine remains small, and it gets stuck on clinical validation and regulatory regimes in different countries (FDA, CE, TFDA). Transplanting semiconductors' success directly onto biomedicine will hit a wall — biomedicine's bottleneck isn't process yield, it's human clinical trials and regulatory review. This is the right path, but it is not a fast one.

It's worth noting that "electronics plus biomedicine" is not an idea unique to Taiwan either. America's Apple and Nvidia, and South Korea's Samsung, are all using their own hardware and AI strengths to push into digital health and medical imaging; if Taiwan simply carries its contract-manufacturing mindset into hospitals, it will quickly fall back into being a "three-to-four-percent margin" hardware supplier on a track the whole world can already see. What can genuinely build a moat is stacking two things unique to Taiwan on top of each other: first, the solid clinical settings of its medical centers and the massive real-world data accumulated through National Health Insurance; second, top-tier semiconductor and systems-integration capability — using the former to feed and validate AI and smart medical devices developed with the latter, producing products that "even someone with the chips still can't get this clinical data and setting." Taiwan's winning chance lies not in "being able to make the hardware," but in "binding hardware, AI and local clinical data into a system outsiders can't easily replicate" — which requires the medical community, industry and regulators all willing to work together to pave the road for data governance and clinical validation. It is hard, but it is the one wall that truly cannot be carried away.

Once the ledger is closed, Taiwan's position is actually clear. Biotech is worth investing in, but "a second sacred mountain" should be downgraded to an aspiration for "a second pillar" — which is really about putting resources in the right place. This falls into three stances:

For the state, the most practical positioning is to treat biomedicine as a "resilience and hedging asset," not another single-point sacred mountain that concentrates risk. First, deal with the internal wall: find a more sustainable balance between public affordability and industry incentives on National Health Insurance drug pricing, and treat supply self-sufficiency (raw materials, key formulations) as a national-security project; only then talk about scaling up. Both the NT$24 billion drug-resilience program and the direction of the Biotech and Pharmaceutical Industry Development Act are right — the key is to tie effectiveness to measurable milestones, not to the spending itself.

For industry intermediaries (trade associations, non-profit institutes, venture capital), the task is "prioritization," not "spreading resources evenly." Put the most resources behind the two paths with the strongest footing — CDMO's geopolitical de-risking dividend, and the cross-domain integration of "electronics plus biomedicine"; for a high-risk bet like original new-drug development, invest in batches keyed to international clinical milestones, and don't let limited patient capital be diluted by spreading it evenly.

For small and mid-sized biotech and medical-device makers, the most honest thing to say is: know which layer you're standing on. Those with cash flow should dig deeper into contract manufacturing and niche medical devices, turning Taiwan's regulatory alignment and manufacturing flexibility into a moat; those betting on new drugs should set a stop-loss first, and tie their resources to the piece of know-how and international data that is most uniquely theirs and that nobody else can take away — don't bet the whole company in the middle of a winter.

This generation of Taiwanese is planting trees for the next generation. Planting trees is the right thing to do — a nation shouldn't live off a single mountain alone. But what those planting the trees most need is honesty: knowing the trees are still small, knowing which ones are growing fastest, knowing which wall has to come down first. Calling biotech "an already-secured second sacred mountain" is lying to ourselves; treating it as "a forest worth patiently planting, capable of spreading risk," is the judgment that actually serves Taiwan. A sacred mountain isn't declared into being — it grows into being. And that growth starts with admitting it isn't a sacred mountain yet.