The funds will be channelled through the National Science and Technology Program for Nanoscience and Nanotechnology.

In terms of per capita government spending at purchasing-power parity, the Taiwan government was the leading domestic investor in nanotech worldwide in 2004, spending $9.40 per capita, nearly double the spending of the US.

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According to Shou-Hong Chang, deputy general director of the Mechanical Industry Research Laboratories at the Industrial Technology Research Institute, the programme aims to induce private investment of $4.1bn in Taiwan’s nanotech industry by 2008. Dr Chang said Taiwan has 410 companies working on nanotech processes, which have brought 450 products to market, generating a production value of $1.2bn.

Matthew Nordan, vice-president of research for Lux Research Inc, has advised Taiwanese companies looking to enter the nanotech sector to focus on mid-stream processes. Mr Nordan said that Taiwanese manufacturers could follow the model laid out in the IT industry, generating intermediate products with nanoscale features for larger OEM (original equipment manufacturer) buyers. These ‘nanointermediates’ could include coatings, fabrics, memory and logic chips, contrast media, optical components and orthopaedic materials.