Taiwan's Growing 'Bio Pan TSMC'... Will It Become a Rival to Korea's CDMO?

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Could a company like Taiwan's TSMC, the global leader in semiconductor foundry services, emerge in the bio industry as well? Taiwan Bio-Manufacturing Corporation (TBMC), a bio-pharmaceutical contract development and manufacturing organization (CDMO) company fully supported by the Taiwanese government, is preparing to challenge the dominance of Korean bio CDMOs.

According to the global bio industry on the 5th, the first production line factory of TBMC, launched in May 2023 under the leadership of Taiwan's Ministry of Economic Affairs, will be completed by the end of this year. TBMC is a joint venture between the Taiwanese government and the U.S. bio-pharmaceutical manufacturer National Resilience. It is Taiwan's first bio-pharmaceutical CDMO.

TBMC was established as Taiwan realized the necessity of advanced bio-pharmaceutical manufacturing during the COVID-19 pandemic when vaccine shortages occurred. TBMC plans to focus on CDMO services in four major areas: nucleic acid therapeutics, gene therapy, cell therapy, and biologics (protein drugs). In February last year, TBMC signed a partnership agreement with the U.S. CDMO company National Resilience and sent 39 TBMC employees for training. National Resilience was the company that manufactured and supplied messenger RNA (mRNA), the raw material for Moderna's COVID-19 vaccine. The co-founder and current vice chairman of this company is Yang Yu-min, a Taiwanese biotechnology entrepreneur. The goal is to quickly transfer and adopt U.S. CDMO technology to compete in the global market. After the technology partnership, then Taiwanese President Tsai Ing-wen met with the National Resilience delegation and emphasized that the biotechnology and medical industries are among Taiwan's key policy priorities.

At the end of last year, TBMC raised about 2.3 billion New Taiwan dollars (approximately 101.7 billion Korean won) through Series A (initial seed investment) funding. Currently, the company's capital amounts to 4.59 billion New Taiwan dollars (approximately 203 billion Korean won). In June last year, the Nangang Process Development Research Institute was completed, and the Zhubei City GMP (Good Manufacturing Practice) factory is being constructed in two phases. The first phase, including nucleic acid and cell culture facilities, is scheduled for completion by the end of this year, and the second phase, including vaccine and viral vector manufacturing facilities, is expected to be completed next year. Major shareholders include government funds (National Development Fund) holding about 22%, public funds such as the Industrial Technology Research Institute under the Executive Yuan and the National Science and Technology Development Fund holding about 35%, and National Resilience among others.

TBMC CI

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The launch and corporate structure of TBMC closely resemble those of TSMC. TSMC was established as a public enterprise in 1987 as part of Taiwan's semiconductor industry promotion project. In its early days, it grew by acquiring technology from Philips of the Netherlands. Taiwan's economy is centered on small and medium-sized enterprises, so large-scale facility investments are rare among private companies. This is why the government discovers promising industries and establishes and supports companies through a unique structure. Along with comprehensive government support, including talent development and recruitment, legislative and regulatory easing, Taiwan's economy was able to build manufacturing competitiveness.

Jhang Yo-shian, CEO of TBMC, said, "CDMO must be fast, excellent, affordable, and flexible to be profitable," adding, "The pharmaceutical foundry model requires maintaining factory utilization, so the initial Zhubei factory was designed to have flexible production capabilities."

Like Korean bio companies, Taiwan's TBMC can serve as a manufacturing base to counterbalance China. CEO Jhang said, "Especially since the U.S. biosecurity law was promoted last year, many U.S. companies are seeking TBMC," adding, "Building factories or laboratories in Taiwan is cheaper, requires less capital investment, and the construction speed is faster than in the U.S. Taiwan can achieve speed, excellence, and cost efficiency, which are important advantages for a bio-pharmaceutical foundry."

However, it is expected to take considerable time for TBMC to challenge Korean CDMOs, which are rapidly increasing their global market share. Notably, the largest segment in the current CDMO market, antibody therapeutics, is not included in TBMC's business areas. An industry insider said, "The fields TBMC currently aims to focus on are not yet large markets," adding, "While the business may expand to areas such as antibody therapeutics in the future, it is still at a stage where we need to observe what manufacturing infrastructure and processes they will establish and how they will design their business model."

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