Taiwan's 5G Network Construction and Digital Transformation

30-Second Overview

Taiwan launched commercial 5G services in June 2020, becoming a pioneer in 5G development across Asia. As of 2023, more than 29,000 5G base stations have been built island-wide, achieving a population coverage rate of 94.36% — a global leader in infrastructure. Through the "Digital Nation and Innovative Economic Development Program (DIGI+)," the government has driven comprehensive digital transformation, and in 2022 established the Ministry of Digital Affairs (moda) to coordinate related policies.

However, 5G subscriber penetration stands at only 25%, and application services have yet to break through, revealing that challenges remain between infrastructure buildout and commercial adoption. This gap is the most central issue in Taiwan's 5G policy at the current stage.

Taiwan's 5G development model offers a distinctive case study: when government-led rapid construction and market-driven application adoption move at different speeds, how can policy bridge the gap?

Keywords: 5G network, digital transformation, DIGI+ Program, Ministry of Digital Affairs, smart city, Internet of Things

Why It Matters

5G network construction and digital transformation are key strategies for Taiwan to maintain its technological competitiveness.

5G provides the high-speed, low-latency network foundation for artificial intelligence, the Internet of Things, and smart manufacturing. The digital economy is projected to drive NT$1.2 trillion in GDP growth (by 2025). At the international competition level, digital infrastructure helps sustain Taiwan's critical position in the global technology supply chain.

On the social front, digital transformation involves two dimensions simultaneously: national security (building autonomous and controllable infrastructure) and digital inclusion (enabling rural and elderly populations to participate). Lacking either one weakens the overall strategic effect.

Taiwan's 5G Development Timeline

Spectrum Auction and Commercial Launch

Taiwan's 5G development began with spectrum planning, with the government using rapid spectrum release and construction subsidies as primary tools:

Key Milestones:

In December 2019, the 5G spectrum auction began, reaching a total bid value of NT$142.1 billion. In February 2020, the five major telecom operators obtained their licenses.

June 30, 2020: Chunghwa Telecom launched first, ushering Taiwan into the 5G era
July–August 2020: Far EasTone, Taiwan Mobile, Taiwan Star, and Asia Pacific Telecom launched in succession (Taiwan Star was merged into Taiwan Mobile in 2023¹)

Spectrum Allocation Results:

Telecom Operator	Frequency Band	Bandwidth	Bid (NT$ billion)
Chunghwa Telecom	3.5GHz	90MHz	50.6
Far EasTone	3.5GHz	80MHz	44.9
Taiwan Mobile	3.5GHz + 28GHz	60MHz + 200MHz	30.5
Taiwan Star	3.5GHz + 28GHz	40MHz + 200MHz	11.5
Asia Pacific Telecom	3.5GHz + 28GHz	40MHz + 190MHz	4.7

※ Taiwan Star completed its merger with Taiwan Mobile in May 2023 and has since been integrated under Taiwan Mobile¹.

Rapid Infrastructure Deployment

Taiwan's 5G base station construction pace leads globally, with government subsidies accelerating the buildout timeline:

Construction Progress Statistics:

From approximately 4,000 stations at the end of 2020 to over 29,087 in March 2023², the number of base stations grew more than sevenfold in three years, with a 2025 target of 39,000 stations.

End of 2021: Approximately 15,000 base stations
End of 2022: Approximately 25,000 base stations

Coverage Achievements:

Population coverage: 94.36% (2023)
Major commercial district coverage: nearly 100%
Expressway coverage: over 85%
High-speed rail corridor coverage: over 90%

Government Policy Support

The government has accelerated 5G deployment through multiple policy tools:

Key Policy Measures:

In 2021, the Accelerated Investment Act was passed, allocating NT$15.5 billion in subsidies³, enabling the original five-year base station construction target to be completed approximately 2.5 years ahead of schedule.

Domestic sourcing requirement: Subsidy conditions require domestically branded equipment to account for 40%
Regulatory streamlining: Simplified base station installation permitting procedures

The DIGI+ Program: Blueprint for a Digital Nation

Program Background and Objectives

The "Digital Nation and Innovative Economic Development Program (2017–2025)" is Taiwan's overarching digital transformation strategy, known as the DIGI+ Program.

The Five Dimensions of "DIGI+":

The acronym "DIGI+" maps to five dimensions: Development (building infrastructure), Innovation (experimental pilots), Growth (emerging industry expansion), Inclusion (digital inclusion), and Plus (cross-domain value addition).

D – Development: Building a solid foundation
I – Innovation: Fostering diverse experimentation

Core Objectives:

Digital Innovation: Create an environment conducive to digital innovation
Digital Economy: Develop a globally competitive digital economy
Digital Government: Build a proactive, transparent, citizen-friendly digital government
Digital Territory: Establish a secure, resilient digital territory
Digital Inclusion: Create an equitable, accessible digital society

Seven Pillars of Action Plans

The DIGI+ Program encompasses seven pillars spanning infrastructure to application services:

1. Digital Innovation Infrastructure

Ultra-broadband network construction (fiber, 5G)
Cloud service platforms
IoT testbeds
Data governance and open data

2. Digital Economy Advancement

Industry digital transformation consulting
Startup incubation
Cross-border e-commerce development
Digital financial services

3. Digital Government Services

One-stop integration of government digital services
Digital identity verification mechanisms
Open government data
Public participation platforms

4. Digital Rights Protection

Personal data protection legislation
Information security safeguards
Digital literacy enhancement
Digital divide reduction

5. Digital Territory Protection

Critical infrastructure protection
Cybersecurity joint defense framework
National cybersecurity governance
Digital resilience building

6. Digital Talent Development

Digital skills training
Industry-academia collaboration programs
International talent exchange
Lifelong learning systems

7. Smart City and Rural Applications

Smart transportation systems
Smart healthcare services
Smart agricultural applications
Smart tourism development

Establishment of the Ministry of Digital Affairs

Organizational Integration and Mission

On August 27, 2022, the Ministry of Digital Affairs (moda) was formally established, marking a significant milestone in Taiwan's digital governance⁴.

Background on Agency Consolidation:
moda consolidated digital-related operations previously scattered across multiple ministries:

moda integrated the National Development Council's Department of Information Management, telecommunications operations from the Ministry of Transportation and Communications, partial functions of the National Communications Commission (NCC), and relevant digital operations from the Ministry of Economic Affairs' Industrial Development Bureau and the Ministry of Science and Technology.

Three Core Missions:

Digital Government: Assisting the public sector with digital transformation
Digital Economy: Promoting the development of digital industries
Digital Infrastructure: Advancing national information infrastructure

Organizational Structure:

moda comprises three core operational units — the Department of Digital Government, the Digital Industry Department, and the Department of Information and Cybersecurity — along with the Department of Democracy Network and the Department of Comprehensive Planning.

Key Policies and Programs

Since its establishment, moda has advanced several important policies:

Digital Government Transformation:

gov.tw unified government portal
Electronic identity (eID) promotion
Government cloud service integration
Cross-agency data sharing platform

Digital Industry Development:

5G private network application promotion
Digital content industry support
Esports industry development
Digital financial regulatory sandbox mechanism

Cybersecurity Protection:

National cybersecurity legislation improvement
Cybersecurity industry development plan
Government cybersecurity joint defense mechanism
Private enterprise cybersecurity consulting

5G Application Domain Development

Vertical Domain Applications

Taiwan is promoting 5G applications across various vertical domains, using field trials to validate business models:

Smart manufacturing is the most concretely advanced domain. Both Foxconn's Tucheng factory and TSMC's 5G use cases have demonstrated viable paths from pilot to scale.

Smart Manufacturing

Foxconn's Tucheng factory combines a 5G private network with AI-based quality inspection, while TSMC has deployed a 5G AGV (Automated Guided Vehicle) system. Both cases have entered mass production application.

China Steel: 5G remote operation and AR maintenance
Expected benefits: 20–30% improvement in production efficiency

Smart Healthcare

5G telemedicine connects rural medical resources, and surgical live-streaming teaching enables cross-hospital real-time instruction through 4K/8K ultra-high-definition transmission.

AI-assisted diagnosis: Real-time image analysis and recommendations
Emergency medicine: Real-time connection between ambulances and hospitals

Smart Transportation

The Shalun testbed in Tainan is currently the largest-scale autonomous driving testing site, while smart signal systems optimize intersection management using real-time traffic data.

Connected vehicle applications: V2X communication technology development
Drone delivery: Last-mile logistics for rural areas

Smart Agriculture

Precision agriculture combines IoT sensors with 5G data transmission. Drones can conduct real-time monitoring over large farmland areas, reducing labor costs.

Smart fisheries: Offshore aquaculture environment monitoring
Agricultural product traceability: Blockchain combined with 5G tracking

Private Network Deployment and Business Models

5G private networks allow enterprises to build self-managed network environments, serving as critical digital transformation infrastructure for high-reliability use cases such as factory automation, hospital connectivity, and port intelligence.

Private Network Deployment Models:

Enterprise self-build: Large enterprises invest in and build independently
Telecom-built: Commissioned to telecom operators for construction and operation
Equipment vendor partnership: Collaboration with network equipment vendors
Government subsidies: Applying for digital transformation-related grants

Business Model Innovation:

MaaS (Mobility as a Service) integrates multiple transportation options; HealthTech platforms commercialize telemedicine services.

AgriTech: Agricultural data services
EdTech: Education technology applications

Challenges and Difficulties

Low Subscriber Penetration

Taiwan's 5G infrastructure is among the world's best, yet subscriber penetration is approximately 25% — far below South Korea's 45% and the United States' 35% — revealing a significant gap between infrastructure and application adoption.

Penetration Status (circa 2023, based on national telecom regulators and research institutions⁵):

5G subscriber penetration: 25%⁶
South Korea (same period): 45%
United States (same period): 35%
China (same period): 30%

Reasons for Low Penetration:

Insufficient application services: Killer applications have yet to emerge
High pricing: 5G plans cost 30–50% more than 4G
Limited experiential difference: Everyday use shows little improvement over 4G
Device costs: 5G smartphone prices remain relatively high

Slow Commercial Application Development

B2B enterprise-level applications face multiple challenges: high 5G private network deployment costs, complex integration with legacy systems, and unclear return on investment — causing enterprises to观望 rather than act.

Technical Challenges:

High 5G private network deployment costs
Complex integration with existing systems
Shortage of technical talent
Unclear return on investment

Commercial Challenges:

Immature business models
Difficulties in cross-industry collaboration
Regulatory adaptation issues
Cybersecurity concerns

International Competitive Pressure

Taiwan's 5G development faces intense international competition, primarily from two directions: technology dependence and geopolitics.

Technology Dependence:

Core technologies still rely on foreign suppliers
Limited 5G chip design capability
Insufficient voice in standards setting

Geopolitical Impact:

US-China technology war affects supply chains
Restricted choices among equipment vendors
Increased national security considerations

Digital Transformation Outcomes and Impact

Economic Benefits

Since the implementation of the DIGI+ Program, the digital economy has grown from NT$12 trillion in 2017 to NT$17 trillion in 2023⁷, with startup investment growing 20% annually and digital-related employment increasing by 150,000 jobs.

Quantitative Outcomes:

Digital economy scale: Grew from NT$12 trillion in 2017 to NT$17 trillion in 2023⁷
GDP contribution: Per the Executive Yuan's DIGI+ Program, Taiwan's digital economy continues to grow (specific proportion figures pending updated official release)
Startup investment: 20% annual growth, cumulatively exceeding NT$80 billion
Employment creation: Digital-related workforce increased by 150,000

Industry Transformation Results:

Manufacturing digitization level increased by 45%
SME cloud adoption rate reached 60%
E-commerce transaction volume grew 25% annually
Digital financial services coverage reached 85%

Digital transformation has changed the fabric of daily life in Taiwan at the practical level: online application services reach 95%, electronic invoice adoption is at 90%, and mobile payment penetration is at 80%.

Government Service Digitization:

Online application services reach 95%
Cross-agency data sharing saves citizens time traveling between offices
Digital identity authentication usage rate reaches 70%
Electronic invoice adoption rate reaches 90%

Digital Life Adoption:

Mobile payment penetration reaches 80%
Remote work systems established
Online education platforms matured
Smart city services expanded

Enhanced International Standing

Taiwan has achieved significant improvement in global digital competitiveness rankings:

International Ranking Performance:

IMD World Digital Competitiveness Ranking: 9th (2023)⁸
Network Readiness Index (NRI): 12th (2023)⁹
Digital Government Development Index: 9th
Overall 5G Development Index: 4th

Future Development Directions

6G Forward Deployment

Taiwan has initiated 6G preliminary research, beginning technology studies in 2024, targeting participation in international standards setting by 2027, conducting technology verification by 2029, and aiming for commercial service readiness by 2030.

Technology Focus Areas:

Terahertz frequency communication
Satellite-terrestrial integrated networks
AI-native networks
Holographic communication technology

Digital Resilience Strengthening

In the face of global uncertainty, Taiwan is strengthening overall digital resilience through supply chain diversification and key technology autonomy.

Key Measures:

Supply chain diversification
Key technology autonomy
Enhanced cybersecurity protection capabilities
Deepened international cooperation

Priority Areas:

Semiconductor supply chain security
Cloud service sovereignty
Cross-border data flow governance
Digital human rights protection

Net-Zero Digital Transformation

Net-zero emissions targets and digital transformation are converging: data center energy efficiency, solar-powered base stations, and smart grids all require digital infrastructure and green transformation to advance in tandem.

Green Digital Initiatives:

Data center energy-saving technologies
Solar-powered 5G base stations
Smart grid construction
Digital carbon footprint tracking

Circular Economy Applications:

Digitalized electronic waste recycling
Shared economy platform development
Smart city energy management
Sustainable supply chain management

Global Position and Influence

Asia-Pacific Regional Role

Taiwan's role in Asia-Pacific digital development is built on two mutually reinforcing foundations: manufacturing-side technology output (semiconductor chips, network equipment) and standards-side specification participation (3GPP, IEEE 802.11). This "manufacturing + standards" dual-track positioning makes Taiwan's role in the global digital supply chain harder to replace.

Taiwan's achievements in the IMD Digital Competitiveness Ranking (9th) and the Overall 5G Development Index (4th) reflect the integration of policy coordination, construction speed, and industrial application — rather than the strength of any single metric.

Technology Output:

Semiconductor chip technology
Network equipment manufacturing
Software solutions
System integration services

Standards Setting Participation:

3GPP 5G standards contributions
IEEE 802.11 standards development
| ITU-T recommendation participation
Open network architecture promotion

International Cooperative Partnerships

Taiwan has established multi-layered international digital cooperation relationships, with the Taiwan-US Science and Technology Cooperation Agreement and the Taiwan-Japan Digital Cooperation Dialogue being the two most substantively advanced axes.

Key Cooperation Frameworks:

Taiwan-US Science and Technology Cooperation Agreement
Taiwan-Japan Digital Cooperation Dialogue
Taiwan-EU Digital Partnership
Asia-Pacific Digital Economy Partnership Agreement

Technology Exchange:

Talent development cooperation programs
Joint research institution projects
Shared innovation testbeds
Standards setting coordination mechanisms

Conclusion

Taiwan has demonstrated the wisdom of a small nation with a big strategy in 5G network construction and digital transformation. From rapid infrastructure deployment to forward-looking policy planning, both reflect the strengths and determination of Taiwan's technology development. However, translating infrastructure advantages into widespread application adoption, and turning policy planning into commercial success, still requires sustained efforts from government, industry, and society.

In the face of intensifying global digital competition and geopolitical complexity, Taiwan must find a balance among technological autonomy, international cooperation, and social inclusion to truly realize the vision of a digital nation — ensuring that every citizen can benefit from digital transformation.

The impact of 5G and digital transformation has extended beyond the scope of a technology upgrade, touching the simultaneous restructuring of business models, public services, and modes of social participation. Taiwan's experience shows that government policy, industry investment, and social participation are all indispensable — and this combination itself is exportable knowledge.

References

NCC — Taiwan Mobile–Taiwan Star Merger Approval Announcement (2023) — Taiwan Star completed its merger with Taiwan Mobile in May 2023 and has since been integrated under Taiwan Mobile↩
National Communications Commission (2023). "5G Base Station Construction Statistics Report" — As of March 2023, over 29,087 5G base stations island-wide, with population coverage reaching 94.36%↩
STPI Industry & Technology Intelligence Service (2021). "NCC Allocates NT$15.5 Billion Over Two Years to Accelerate National 5G Infrastructure" — Explanation of the NT$15.5 billion subsidy program under the Accelerated Investment Act↩
Wikipedia (2026). "Ministry of Digital Affairs (Republic of China)" — Ministry of Digital Affairs establishment date (August 27, 2022) and organizational structure↩
GSMA — Mobile Economy Asia Pacific 2023 — 5G subscriber penetration rates by country; figures for South Korea, the United States, China, etc., are 2023 estimates from national telecom regulators and research institutions, with slight variations across organizations' methodologies↩
Economic Daily News (2023). "Base Stations Nearly Everywhere, Yet Consumer Penetration Only at 25%: A Comprehensive Review of Taiwan's Three Years of 5G" — Taiwan's 5G subscriber penetration rate of 25% and international comparison data↩
Executive Yuan (2023). "DIGI+ Program Implementation Results Report" — DIGI+ Program 2017–2025 implementation results, digital economy grew from NT$12 trillion in 2017 to NT$17 trillion in 2023↩
IMD World Digital Competitiveness Ranking 2023 — IMD 2023 Digital Competitiveness Ranking, Taiwan placed 9th (up from 11th in 2022); confirmed by official Ministry of Digital Affairs press release↩
Portulans Institute — Network Readiness Index 2023 — Network Readiness Index (NRI) 2023 Report, Taiwan ranked 12th↩