Taiwan Fund : Monthly Insights – August 2023

August 2023 Monthly Insights

THE TAIWAN FUND, INC.

Manager's Commentary

Market Review

The Taiwan Stock Exchange Weighted Index ("TWSE") declined 3.85% in August 2023, in US dollar terms, with electronics leading the decline. The top three outperforming industry groups were Media & Entertainment, Automobiles & Components and Telecommunication Services. The top three underperforming industry groups were Pharmaceuticals, Biotechnology & Life Sciences, and Utilities and Household & Personal Products.

Fund Review (Attribution Reports)

The Taiwan Fund, Inc. (the "Fund") outperformed the Taiwan TAIEX Total Return Index (the "Benchmark") in August, as it benefited from its overweight position in Capital Goods. Performance also benefitted from its underweight positions in the Materials and Banks industry groups. Conversely, the Fund's performance was negatively impacted by its overweight positions in both the Consumer Durables & Apparel and Technology Hardware & Equipment industry groups. At the stock selection level, the largest contributors were AIchip Technologies Ltd., Gigabyte Technology Co. Ltd. and ASPEED Technology Inc., while the largest relative detractors were Taiwan Semiconductor Manufacturing Co. Ltd., Wistron Corporation and Global Unichip Corporation.

Key Transactions

The total securities holdings of the Fund stood at 89.50% of net assets at August month-end. This represented an increase from 86.81% at July month-end. The major changes in the portfolio were reductions to the Semiconductor & Semiconductor Equipment and Technology Hardware & Equipment industry groups as a result of the expected slow demand recovery in the second half of 2023. Conversely, the Fund has strategically increased its exposure to the Capital Goods industry group in order to better seize upon the potential trends of green energy and AI (artificial intelligence) servers.

In the semiconductor space, the Fund has reduced its holdings in Nuvoton Technology Corporation and Taiwan Semiconductor Manufacturing Co. Ltd. as the industry recovery pace has been lagging and inventory adjustment levels are also expected to lag. In the Capital Goods industry group, the Fund increased its positions in Fortune Electric Co. Ltd., and Sunonwealth Electric Machine Industry Co. Ltd. on the expectation of rising demand for power transformers and AI server heat dissipation.

Outlook and Strategy

Despite the fact that the U.S. Consumer Price Index ("CPI") increased 3.2% from July 2022 to July 2023, the annual core CPI edged down to 4.7% for the same YoY (Year on Year) period.

Fund Data

Description	Seeks long-term
	capital appreciation
	primarily through
	investments in equity
	securities listed in Taiwan.
Inception Date	December 23, 1986
Total Fund Assets	$295.1
(millions)
Median Market	$3.024
Cap (in billions)
Distribution	Annual
Frequency
Management	Nomura Asset
Firm	Management U.S.A. Inc.

Fund Manager

Sky Chen

Lead Portfolio Manager

Performance

(US$ Returns as of 8/31/2023)

Fund Benchmark1

One Month	-1.05%	-3.85%
Three Month	11.16%	-0.35%
One Year	32.61%	9.25%
Three Year	18.70%	10.78%
(Annualized)

Net Asset Value/Market Price

(as of 8/31/2023)

NAV/Market Price	$39.73 / $31.10

High/Low Ranges (52-Week)

High/Low NAV	$41.48 / $23.07
High/Low Market Price	$34.18 / $18.70
Premium/Discount to NAV	-21.72%
(as of 8/31/2023)

Fund Data (Common Shares)

Shares	7,427,371
Outstanding
Average Daily	19,272
Volume
Expense Ratio2	1.62%

1Taiwan TAIEX Total Return Index.	NOMURA ASSET MANAGEMENT
2Six months ended February 28, 2023, annualized, unaudited, before fee waiver.
The unaudited expense ratio after the fee waiver is 1.45%.	Nomura Asset Management U.S.A. Inc.

1

August 2023 Monthly Insights

THE TAIWAN FUND, INC.

Manager's Commentary (Key Transactions continued)

This was below market estimates and was at its lowest level since October 2021. As a result, we expect that consumer consumption in the US will gradually accelerate. Therefore, we have pivoted to a more positive outlook on consumer durables & apparel industries.

As carbon emissions have become a prime policy target for many countries, we expect that the demand for environmental industries and alternative energy will maintain stable growth. As such, we are positive on the long-term growth for capital goods driven by robust demand from the green energy industries.

The Taiwan market pulled back in August, primarily due to profit taking pressure in Semiconductors & Semiconductor Equipment and Technology Hardware & Equipment industry groups. We continue to be positive on these industry groups through 2024. After the ongoing inventory rebalancing comes to an end for semiconductors and in consideration of the strong order book for AI servers, we believe earnings will grow next year. As a result, we remain bullish on AI-related names, semiconductors, capital goods, and selective consumer goods.

2

August 2023 Monthly Insights

THE TAIWAN FUND, INC.

Returns (%)

	1	3		1	3	5	10	Since
	Month	Month	YTD	Year	Year	Year	Year Inception
NAV	-1.05	11.16	42.40	32.61	18.70	20.25	13.70	10.07
Market Price	-6.66	8.48	34.69	23.41	16.81	17.98	12.15	8.33
Taiwan TAIEX	-3.85	-0.35	17.29	9.25	10.78	11.81	10.98	-
Total Return Index
Taiwan TAIEX	-4.26	-3.19	13.56	5.32	6.77	7.72	6.90	-
Price Index
MSCI Taiwan	-4.49	-2.12	15.45	6.52	8.73	11.23	10.85	-
Index (net)

Calendar Year Returns (%)

	2015	2016	2017	2018	2019	2020	2021	2022
NAV	-6.43	11.17	28.44	-14.96	47.11	41.97	55.09	-36.27
Market Price	-10.52	10.05	33.61	-19.11	46.75	39.81	58.26	-38.54
Taiwan TAIEX	-10.40	17.81	29.45	-7.86	32.19	35.62	29.04	-26.80
Total Return Index
Taiwan TAIEX	-13.81	13.11	24.56	-11.51	26.46	31.01	25.59	-30.15
Price Index
MSCI Taiwan	-11.72	18.54	27.53	-8.93	36.37	40.99	26.13	-29.76
Index (net)

Past performance is not indicative of future results.

Returns are expressed in US dollars and are annualized except for periods of less than one year. Source: Nomura Asset Management U.S.A. Inc., utilizing data from State Street Bank & Trust Company. Returns for the Fund are historical returns that reflect changes in net asset value and market price per share during each period and assume that dividends and capital gains, if any, were reinvested. Net asset value is total assets less total liabilities divided by the number of shares outstanding. NAV performance includes the deduction of management fees and other expenses. NAV and market price returns do not reflect broker sales charges or commissions, which would reduce returns. Expense Ratio: 1.62% for the six months ended February 28, 2023, annualized, unaudited, before fee waiver. The unaudited expense ratio after the fee waiver is 1.45%.

Premium/Discount (1/3/00 - 8/31/23)

10%

0%

-10%

-20%

-30%

1/01

1/02

1/03

1/04

1/05

1/06

1/07

1/08

1/09

1/10

1/11

1/12

1/13

1/14

1/15

1/16

1/17

1/18

1/19

1/20

1/21

1/22

1/23

1/00

8/23

Past performance is not indicative of future results.

Sector Breakdown (%)

	Fund	Benchmark
Information	63.75	59.36
Technology
Industrials	10.42	7.00
Consumer	6.26	5.52
Discretionary
Consumer Staples	3.19	2.22
Materials	3.06	7.15
Communication	2.82	2.87
Services
Financials	0	12.32
Energy	0	1.46
Real Estate	0	1.26
Health Care	0	0.62
Utilities	0	0.22
N/A	0	0.01

Top 10 Holdings (%)
Taiwan Semiconductor	18.90
Manufacturing Co. Ltd.
Fortune Electric Co. Ltd.	4.90
Gigabyte Technology Co. Ltd.	4.74
Alchip Technologies Ltd.	4.70
Quanta Computer, Inc.	4.54
Asia Vital Components Co. Ltd.	4.50
eMemory Technology, Inc.	4.33
Global Unichip Corp.	3.74
Delta Electronics, Inc.	3.69
Sunonwealth Electric Machine	3.46
Industry Co. Ltd.

Holdings and sector weightings are subject to change. Source: State Street Bank & Trust Company, Bloomberg L.P. as of 8/31/2023.

3

August 2023 Monthly Insights

THE TAIWAN FUND, INC.

Portfolio Characteristics

	Fund
Number of Issues	38
Foreign Holdings (%)	89.50
Cash and Other Assets less Liabilities (%)	10.50
Dividend Yield (%)	N.A.
As of 8/31/2023.

Distribution History (10 Year)

					Long-term	Short-term
Ex-dividend Date	Record Date	Payable Date	Distribution/Share	Income	Capital Gain	Capital Gain
12/26/14	12/30/14	1/9/15	2.633200	0.000000	2.633200	0.000000
12/28/17	12/29/17	1/9/18	0.660000	0.660000	0.000000	0.000000
12/20/18	12/21/18	1/4/19	1.707800	0.000000	1.707800	0.000000
12/27/19	12/30/19	1/10/20	1.699100	1.469500	0.164500	0.065100
12/28/20	12/29/20	1/8/21	3.312200	0.375900	0.615600	2.320700
12/27/21	12/28/21	1/10/22	2.922700	0.478000	2.444700	0.000000

Distribution/Share includes income, long-term capital gains, and short-term capital gains.

4

August 2023 Monthly Insights

THE TAIWAN FUND, INC.

All Portfolio Holdings

As of August 31, 2023

	Company
Sector	(exchange ticker)	Price TWD	Holding	Value US$	% of Fund
INFORMATION TECHNOLOGY					63.75
Taiwan Semiconductor Manufacturing Co. Ltd.	2330-TW	549.00	3,235,000	55,767,981	18.90
Gigabyte Technology Co. Ltd.	2376-TW	341.00	1,307,000	13,994,850	4.74
Alchip Technologies Ltd.	3661-TW	2,470.00	179,000	13,883,158	4.70
Quanta Computer, Inc.	2382-TW	253.50	1,683,000	13,396,778	4.54
Asia Vital Components Co. Ltd.	3017-TW	334.50	1,264,705	13,283,841	4.50
eMemory Technology, Inc.	3529-TW	1,815.00	224,000	12,766,238	4.33
Global Unichip Corp.	3443 TW	1,460.00	241,000	11,048,624	3.74
Delta Electronics, Inc.	2308-TW	346.00	1,002,000	10,886,345	3.69
Wistron Corp.	3231-TW	117.00	2,658,000	9,765,155	3.31
ASPEED Technology, Inc.	5274-TW	2,700.00	77,000	6,528,190	2.21
Nuvoton Technology Corp.	4919-TW	123.50	1,392,000	5,398,144	1.83
E Ink Holdings, Inc.	8069-TW	182.50	731,000	4,189,079	1.42
Jentech Precision Industrial Co. Ltd.	3653-TW	647.00	200,000	4,063,241	1.38
Globalwafers Co. Ltd.	6488-TW	459.00	230,000	3,314,964	1.12
SDI Corp.	2351-TW	100.50	955,000	3,013,754	1.02
WinWay Technology Co. Ltd.	6515-TW	599.00	124,000	2,332,313	0.79
Wiwynn Corp.	6669-TW	1,560.00	38,000	1,861,429	0.63
Parade Technologies Ltd.	4966-TW	898.00	65,000	1,832,854	0.62
Gold Circuit Electronics Ltd.	2368-TW	215.50	100,100	677,360	0.23
Grand Process Technology Corp.	3131-TW	532.00	7,000	116,936	0.04
INDUSTRIALS					10.42
Fortune Electric Co. Ltd.	1519-TW	299.50	1,539,000	14,473,506	4.90
Sunonwealth Electric Machine Industry Co. Ltd.	2421-TW	136.00	2,391,000	10,210,729	3.46
Advanced Energy Solution Holding Co., Ltd.	6781-TW	626.00	276,000	5,425,274	1.84
Nak Sealing Technologies Corp.	9942-TW	144.50	143,000	648,847	0.22
CONSUMER DISCRETIONARY					6.26
Nien Made Enterprise Co. Ltd.	8464-TW	299.00	594,000	5,576,939	1.89
Merida Industry Co. Ltd.	9914-TW	193.00	652,000	3,951,329	1.34
Makalot Industrial Co. Ltd.	1477-TW	334.50	196,000	2,058,688	0.70
Fulgent Sun International Holding Co. Ltd.	9802-TW	129.00	505,000	2,045,594	0.69
Gourmet Master Co. Ltd.	2723-TW	113.00	506,000	1,795,425	0.61
Feng TAY Enterprise Co. Ltd.	9910-TW	168.00	324,800	1,713,419	0.58
Giant Manufacturing Co. Ltd.	9921-TW	196.00	120,000	738,543	0.25
Bafang Yunji International Co. Ltd.	2753-TW	168.50	110,000	582,010	0.20
CONSUMER STAPLES					3.19
President Chain Store Corp.	2912-TW	267.50	869,000	7,299,311	2.47
Uni-President Enterprises Corp.	1216-TW	70.70	949,000	2,106,803	0.71
MATERIALS					3.06
Century Iron & Steel Industrial Co. Ltd.	9958-TW	160.00	1,446,000	7,264,849	2.46
Swancor Holding Co. Ltd.	3708-TW	91.70	614,000	1,767,974	0.60
COMMUNICATION SERVICES					2.82
Chunghwa Telecom Co. Ltd.	2412-TW	116.00	1,285,000	4,680,577	1.59
Far EasTone Telecommunications Co. Ltd.	4904-TW	70.60	1,639,000	3,633,473	1.23

Source: State Street Bank and Trust Company, Nomura Asset Management U.S.A. Inc..	5
Note: Cash (including for these purposes cash equivalents) is not included.