Taiwan Fund : Monthly Insights – December 2022

December 2022 Monthly Insights

THE TAIWAN FUND, INC.

Manager's Commentary

Market Review

The TWSE index fell 4.31% in December 2022, in US dollar terms. The top three outperforming industry groups were Household & Personal Products, Health Care Equipment & Services, and Consumer Services. The bottom three performing industry groups were Semiconductors & Semiconductor Equipment, Insurance, Automobiles and Auto Components. The Taiwan TPEx Exchange Index, ("TWOTCI", the over-the-counter index) declined 3.14% in December 2022.

Fund Review (Attribution Reports)

The Taiwan Fund, Inc. (the "Fund") underperformed the Taiwan TAIEX Total Return Index (the "benchmark") in December 2022. The Fund's NAV fell 7.28% as it suffered primarily from its holdings in the Semiconductor & Semiconductor Equipment industry. On an industry group level, the overweight positions in Semiconductors & Semiconductor Equipment and in Technology Hardware, Storage and Peripherals and the underweight positions in Capital Goods hurt performance. On the other hand, the Fund's overweight position in Household Durables and Textiles, Apparel & Luxury Goods, and Cash, as well as stock selection in Diversified Financials added to performance. At the stock selection level, the best performers were Eclat Textile Company Ltd., Chailease Holding Co. Ltd., and Feng TAY Enterprise Co. Ltd. The poorest performers were Taiwan Semiconductor Manufacturing Co. Ltd., Advanced Energy Solution Holding Co. Ltd., and ASPEED Technology Inc.

Key Transactions

The total securities holdings of the Fund stood at 87.71% at December month-end, relatively unchanged from the level at the end of November, 2022 (88.11%). The major changes in the Fund's portfolio were additions to the Consumer Durables & Apparel and Food & Staples Retailing sectors which have experienced decreasing inventory levels and stable earnings growth. The Fund cut positions in the Semiconductor & Semiconductor Equipment sector as well as the Technology Hardware & Equipment sector which have experienced to weak demand.

We added positions to our Consumer Durables & Apparel exposure, via Eclat Textile Co. Ltd., as its inventory levels have improved. We also increased holdings in Food & Staple Retailing, via President Chain Store Corp., in the expectation of a consumption recovery. In contrast, we reduced holdings in the Technology Hardware & Equipment sectors, primarily because of weaker than expected demand. We continued to reduce our position in Wiwynn Corp., as one of its major clients announced a conservative business outlook. Additionally, we reduced our position in Unimicron Technology Corp., due to lowered utilization rate in its ABF substrate division. We have, however, added positions in Compeq Manufacturing Co. Ltd. and Largan Precision Co. Ltd., on the expectations of smartphone spec upgrades to speed up in 2023.

Outlook and Strategy

With ongoing macro headwinds such as inflation and the technology down cycle expected to last through the 1st half of 2023, we foresee a challenging 2023 ahead. Inflationary pressures are likely to start easing in the first half of 2023. Nevertheless, it may not warrant rate cuts during the year. A weakening of demand is likely to persist and should set up a potentially rough earnings period for the first half of 2023. On the

1Taiwan TAIEX Total Return Index.

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	$208.4
(millions)
Median Market	$2.8
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 12/31/2022)

Fund Benchmark1

One Month	-7.28%	-4.31%
Three Month	7.35%	8.97%
One Year	-36.27%	-26.80%
Three Year	11.95%	8.61%
(Annualized)

Net Asset Value/Market Price

(as of 12/31/2022)

NAV/Market Price	$27.90 / $23.09

High/Low Ranges (52-Week)

High/Low NAV	$45.98 / $23.07
High/Low Market Price	$39.60 / $18.70
Premium/Discount to NAV	-17.24
(as of 12/31/2022)

Fund Data (Common Shares)

Shares	7,470,494
Outstanding
Average Daily	16,407
Volume
Expense Ratio2	1.02%

NOMURA ASSET MANAGEMENT

212 months ended August 31, 2022, before waiver fee.	Nomura Asset Management U.S.A. Inc.
The expense ratio after the fee waiver is 0.96%.

Manager's Commentary (Outlook and Strategy continued)

inventory side, although adjustments have yet to reach their end, there have been signs that the correction cycle is coming to an end for those industries with an early start of inventory reduction.

We forecast a modest downturn due to moderate capacity growth and a potentially manageable macro recession due to better corporate/consumer balance sheets. Therefore, a fundamental dip in the 1st half of 2023 could provide potential buying opportunities. We will continue to focus on companies which have benefited from market share gains, secular growth trends and strong competitiveness as they are more likely to outperform in a weaker cycle. We will also focus on those companies in which earnings have stabilized and are trading at reasonable valuations. We will, however, stay alert on the macro environment and potential recession risks.

December 2022 Monthly Insights

THE TAIWAN FUND, INC.

Returns (%)

	1	3		1	3	5	10	Since
	Month	Month	YTD	Year	Year	Year	Year Inception
NAV	-7.28	7.35	-36.27	-36.27	11.95	11.91	10.59	9.18
Market Price	-5.76	9.90	-38.54	-38.54	10.79	10.05	9.50	7.60
Taiwan TAIEX	-4.31	8.97	-26.80	-26.80	8.61	9.31	9.65	-
Total Return Index
Taiwan TAIEX	-4.46	8.78	-30.15	-30.15	4.75	5.16	5.66	-
Price Index
MSCI Taiwan	-5.46	9.63	-29.76	-29.76	7.70	9.18	9.46	-
Index (net)

Calendar Year Returns (%)

	2014	2015	2016	2017	2018	2019	2020	2021
NAV	-2.25	-6.43	11.17	28.44	-14.96	47.11	41.97	55.09
Market Price	-1.28	-10.52	10.05	33.61	-19.11	46.75	39.81	58.26
Taiwan TAIEX	5.05	-10.40	17.81	29.45	-7.86	32.19	35.62	29.04
Total Return Index
Taiwan TAIEX	1.93	-13.81	13.11	24.56	-11.51	26.46	31.01	25.59
Price Index
MSCI Taiwan	9.36	-11.72	18.54	27.53	-8.93	36.37	40.99	26.13
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: 1.02%. for the 12 month period ended August 31, 2022, before waiver fee. The expense ratio after the fee waiver is 0.96%.

Premium/Discount (1/3/00 - 12/31/22)

10%

0%

-10%

-20%

-30%

1/01

1/05

1/06

1/07

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

12/22

1/00

1/02

1/03

1/04

1/08

Past performance is not indicative of future results.

Sector Breakdown (%)

	Fund	Benchmark
Information	69.15	54.25
Technology
Consumer	6.47	6.06
Discretionary
Communication	4.50	3.35
Services
Industrials	3.48	7.73
Consumer Staples	1.86	2.47
Financials	1.56	13.5
Materials	0.69	8.55
Energy	0.00	1.75
Real Estate	0.00	1.44
Health Care	0.00	0.74
Utilities	0.00	0.17

Top 10 Holdings (%)
Taiwan Semiconductor	23.82
Manufacturing Co. Ltd.
Delta Electronics, Inc.	4.23
eMemory Technology, Inc.	4.00
Nuvoton Technology Corp.	3.50
Advanced Energy Solution Holding	3.41
Co. Ltd.
Global Unichip Corp.	3.22
Alchip Technologies Ltd.	2.64
Lotes Co. Ltd.	2.62
ASPEED Technology, Inc.	2.50
Asia Vital Components Co. Ltd.	2.46

Holdings and sector weightings are subject to change. As of 12/31/2022.

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December 2022 Monthly Insights

THE TAIWAN FUND, INC.

Portfolio Characteristics

	Fund
Number of Issues	43
Foreign Holdings (%)	87.71
Cash (%)	12.29
Dividend Yield (%)	1.71
As of 12/31/2022.

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.

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December 2022 Monthly Insights

THE TAIWAN FUND, INC.

All Portfolio Holdings

As of December 31, 2022

	Company
	(exchange
Sector	ticker)	Price TWD	Holding	Value US$	% of Fund
INFORMATION TECHNOLOGY					69.15
Taiwan Semiconductor Manufacturing Co. Ltd.	2330-TW	448.50	3,402,000	49,642,824	23.82
Delta Electronics, Inc.	2308-TW	286.50	945,000	8,808,788	4.23
eMemory Technology, Inc.	3529-TW	1,335.00	192,000	8,339,542	4.00
Nuvoton Technology Corp.	4919-TW	115.00	1,950,000	7,296,123	3.50
Global Unichip Corp.	3443 TW	641.00	322,000	6,715,427	3.22
Alchip Technologies Ltd.	3661-TW	788.00	215,000	5,512,193	2.64
Lotes Co. Ltd.	3533-TW	826.00	203,000	5,455,516	2.62
ASPEED Technology, Inc.	5274-TW	1,685.00	95,000	5,208,147	2.50
Asia Vital Components Co. Ltd.	3017-TW	112.00	1,406,000	5,123,457	2.46
Gold Circuit Electronics Ltd.	2368-TW	86.80	1,772,100	5,004,580	2.40
MediaTek, Inc.	2454-TW	625.00	202,000	4,107,628	1.97
E Ink Holdings, Inc.	8069-TW	161.00	691,000	3,619,625	1.74
Accton Technology Corp.	2345-TW	234.50	407,000	3,105,253	1.49
Hon Hai Precision Industry Co. Ltd.	2317-TW	99.90	916,000	2,977,287	1.43
Jentech Precision Industrial Co. Ltd.	3653-TW	376.50	240,000	2,939,923	1.41
SDI Corp.	2351-TW	96.40	934,000	2,929,434	1.41
Realtek Semiconductor Corp.	2379-TW	281.00	282,000	2,578,191	1.24
Tong Hsing Electronic Industries Ltd.	6271-TW	191.00	350,100	2,175,631	1.04
Compeq Manufacturing Co Ltd	2313-TW	44.50	1,376,000	1,992,224	0.96
Genius Electronic Optical Co. Ltd.	3406-TW	335.50	181,000	1,975,745	0.95
Wiwynn Corp.	6669-TW	797.00	76,000	1,970,750	0.95
Gigabyte Technology Co. Ltd.	2376-TW	106.50	481,000	1,666,688	0.80
Parade Technologies Ltd.	4966-TW	773.00	45,000	1,131,753	0.54
Globalwafers Co. Ltd.	6488-TW	427.50	78,000	1,084,902	0.52
Novatek Microelectronics Corp	3034-TW	315.50	101,000	1,036,765	0.50
Largan Precision Co Ltd	3008-TW	2,040.00	15,000	995,591	0.48
Unimicron Technology Corp.	3037-TW	120.00	185,000	722,292	0.35
CONSUMER DISCRETIONARY					6.47
Eclat Textile Co. Ltd.	1476-TW	495.50	287,000	4,626,848	2.22
Fulgent Sun International Holding Co. Ltd.	9802-TW	152.00	505,000	2,497,438	1.20
Feng TAY Enterprise Co. Ltd.	9910-TW	206.50	290,000	1,948,398	0.93
Nien Made Enterprise Co. Ltd.	8464-TW	294.50	160,000	1,533,081	0.74
Makalot Industrial Co. Ltd.	1477-TW	233.00	196,000	1,485,839	0.71
Merida Industry Co. Ltd.	9914-TW	167.00	198,000	1,075,824	0.52
Taiwan Paiho Ltd.	9938-TW	56.80	100,000	184,803	0.09
Giant Manufacturing Co Ltd	9921-TW	200.50	20,000	130,468	0.06
COMMUNICATION SERVICES					4.50
Chunghwa Telecom Co. Ltd.	2412-TW	113.00	1,285,000	4,724,342	2.27
Far EasTone Telecommunications Co. Ltd.	4904-TW	65.90	1,639,000	3,514,181	1.69
Taiwan Mobile Co. Ltd.	3045-TW	94.70	373,000	1,149,260	0.55
INDUSTRIALS					3.48
Advanced Energy Solution Holding Co., Ltd.	6781-TW	643.00	340,000	7,112,948	3.41
Nak Sealing Technologies Corp	9942-TW	105.50	40,000	137,300	0.07
CONSUMER STAPLES					1.86
President Chain Store Corp.	2912-TW	272.00	438,000	3,876,169	1.86
FINANCIALS					1.56
Chailease Holding Co. Ltd.	5871-TW	217.00	460,000	3,247,710	1.56
MATERIALS					0.69
Swancor Holding Co. Ltd.	3708-TW	95.50	463,000	1,438,614	0.69

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.