fp0012593_nq.htm
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-Q

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED MANAGEMENT INVESTMENT COMPANY

Investment Company Act file number:  811-04893

THE TAIWAN FUND, INC.
(Exact name of registrant as specified in charter)

c/o STATE STREET BANK AND TRUST COMPANY
ONE LINCOLN STREET, P.O. BOX 5049
BOSTON, MA 02111-5049
(Address of principal executive offices)(Zip code)

(Name and Address of Agent for Service)
 
Copy to:
 
The Taiwan Fund, Inc.
State Street Bank and Trust Company
Attention: Brian F. Link, Secretary
4 Copley Place,
5th Floor
Boston, MA 02116
Leonard B. Mackey, Jr., Esq.
Clifford Chance US LLP
31 West 52nd Street
New York, New York 10019
 
Registrant’s telephone number, including area code:  (877) 864-5056

Date of fiscal year end:  August 31

Date of reporting period:  November 30, 2014
 
 
 
 

ITEM 1.  SCHEDULE OF INVESTMENTS
 
THE TAIWAN FUND, INC.
Schedule of Investments/November 30, 2014 (Showing Percentage of Net Assets) (unaudited)
 
   
SHARES
    
US $
VALUE
(NOTE 2)
  
             
COMMON STOCKS – 97.6%
            
CHEMICALS — 1.2%
            
Chemical Industry — 1.2%
            
China Steel Chemical Corp.
     415,000       2,065,110  
TOTAL CHEMICALS
             2,065,110  
                 
CONSUMER DISCRETIONARY — 6.6%
                
Auto Components Industry — 1.6%
                
Cub Elecparts, Inc.
     105,804       1,041,031  
Hota Industrial Manufacturing Co., Ltd.
     881,933       1,607,271  
Macauto Industrial Co., Ltd.
     48,000       167,510  
              2,815,812  
                 
Hotels, Restaurants and Leisure Industry — 0.6%
                
TTFB Co., Ltd.
     112,000       959,044  
                 
Leisure Products Industry — 0.3%
                
Topkey Corp.
     123,000       449,115  
                 
Leisure Time Industry — 1.4%
                
KMC Kuei Meng International, Inc.
     116,000       481,655  
Merida Industry Co., Ltd.
     281,000       1,924,937  
              2,406,592  
                 
Multiline Retail Industry — 1.8%
                
Poya Co., Ltd.
     335,440       2,530,907  
Taiwan FamilyMart Co., Ltd.
     92,000       587,123  
              3,118,030  
                 
Textile Industry — 0.9%
                
Eclat Textile Co., Ltd.
     155,000       1,545,117  
TOTAL CONSUMER DISCRETIONARY
             11,293,710  
                 
ELECTRONICS — 17.7%
                
Communications and Internet Industry — 1.0%
                
Wistron NeWeb Corp.
     891,460       1,734,095  
                 
Computer and Peripheral Equipment Industry — 1.8%
                
Advantech Co., Ltd.
     456,778       3,129,071  
                 
Electronic Parts/Components Industry — 1.4%
                
King Slide Works Co., Ltd.
     184,000       2,378,221  
                 
Optoelectronics Industry — 2.2%
                
Largan Precision Co., Ltd.
     48,000       3,699,168  
                 
Semiconductor Industry — 11.3%
                
CHIPBOND Technology Corp.
     1,211,000       2,253,933  
Taiwan Semiconductor Manufacturing Co., Ltd.
     3,729,000       17,049,956  
              19,303,889  
TOTAL ELECTRONICS
             30,244,444  
                 
ENERGY — 1.0%
                
Oil Gas and Electricity Industry General Industry — 1.0%
                
Gigasolar Materials Corp.
     116,800       1,805,923  
TOTAL ENERGY
             1,805,923  
                 
FINANCE — 17.8%
                
Diversified Finance Services Industry — 6.6%
                
Chailease Holding Co., Ltd.
     1,402,000       3,601,551  
China Development Financial Holding Corp.
     6,899,000       2,209,196  
E. Sun Financial Holding Co., Ltd.
     3,974,165       2,516,960  
Mega Financial Holding Co., Ltd.
     1,732,000       1,410,337  
SinoPac Financial Holdings Co., Ltd.
     3,586,000       1,506,358  
              11,244,402  
                 
Financial and Insurance Industry — 11.2%
                
Cathay Financial Holding Co., Ltd.
     3,905,600       6,297,421  
China Life Insurance Co., Ltd.
     1,779,200       1,489,014  
CTBC Financial Holding Co., Ltd.
     5,558,749       3,780,973  
Fubon Financial Holding Co., Ltd.
     3,491,000       5,719,160  
Ruentex Development Co., Ltd.
     1,195,000       1,863,115  
              19,149,683  
TOTAL FINANCE
             30,394,085  
                 
FOODS — 1.8%
                
Food Industry — 0.5%
                
Uni-President Enterprises Corp.
     545,380       881,137  
                 
Food Products Industry — 1.3%
                
Grape King Bio Ltd.
     208,000       863,656  
Green Seal Holding Ltd.
     312,700       1,338,808  
              2,202,464  
TOTAL FOODS
             3,083,601  
                 
HEALTHCARE — 1.0%
                
Health Care Equipments & Supplies Industry — 0.6%
                
Intai Technology Corp.
     201,000       1,058,664  
                 
Healthcare Industry — 0.4%
                
St. Shine Optical Co., Ltd.
     47,000       723,661  
TOTAL HEALTHCARE
             1,782,325  
                 
INDUSTRIALS — 13.1%
                
Airlines Industry — 0.6%
                
China Airlines Ltd. *
     1,145,000       482,826  
Eva Airways Corp. *
     867,000       560,304  
              1,043,130  
                 
Electrical Components Industry — 6.4%
                
Delta Electronics, Inc.
     786,000       4,749,398  
ILI Technology Corp.
     904,000       2,094,411  
Pegatron Corp.
     962,000       2,231,896  
Teco Electric and Machinery Co., Ltd.
     1,758,000       1,823,469  
              10,899,174  
                 
Machinery Industry — 6.1%
                
Airtac International Group
     229,000       2,068,196  
 
The accompanying notes are an integral part of the schedule of investments.
 
 
 
 
 
Schedule of Investments/November 30, 2014 (Showing Percentage of Net Assets) (unaudited) (continued)
 
   
SHARES
    
US $
VALUE
(NOTE 2)
  
                 
INDUSTRIALS —(continued)
                
Hiwin Technologies Corp.
     130,760       1,098,557  
Iron Force Industrial Co., Ltd.
     344,000       1,267,179  
Nak Sealing Technologies Corp.
     342,000       1,171,403  
Sumeeko Industries Co., Ltd.
     325,450       1,083,168  
TSC Auto ID Technology Co., Ltd.
     117,000       861,976  
TURVO International Co., Ltd.
     483,468       1,410,685  
Yungtay Engineering Co., Ltd.
     663,000       1,523,202  
              10,484,366  
TOTAL INDUSTRIALS
             22,426,670  
                 
INFORMATION TECHNOLOGY — 31.0%
                
Communications and Internet Industry — 0.7%
                
Sercomm Corp.
     578,000       1,199,050  
                 
Computer and Peripheral Equipment Industry — 1.8%
                
Axiomtek Co., Ltd.
     618,000       1,357,913  
Posiflex Technology, Inc.
     339,000       1,621,197  
              2,979,110  
                 
Electrical Components Industry — 2.2%
                
Au Optronics Corp.
     5,266,000       2,484,323  
Compeq Manufacturing Co., Ltd.
     2,184,000       1,259,695  
              3,744,018  
                 
Electronic Equipment & Instruments Industry — 1.8%
                
Chroma ATE, Inc.
     866,000       2,339,368  
DYNACOLOR, Inc.
     319,000       721,545  
              3,060,913  
                 
Electronic Parts/Components Industry — 7.4%
                
Hon Hai Precision Industry Co., Ltd.
     4,049,640       12,692,950  
                 
Semiconductor Industry — 12.1%
                
Advanced Semiconductor Engineering, Inc.
     3,653,000       4,432,350  
ASPEED Technology, Inc.
     138,304       1,152,999  
Epistar Corp.
     374,000       703,346  
MediaTek, Inc.
     433,000       6,506,018  
Novatek Microelectronics Corp. Ltd.
     366,000       2,069,634  
Parade Technologies Ltd.
     53,000       518,911  
Powertech Technology, Inc. *
     918,000       1,533,585  
Sino-American Silicon Products, Inc. *
     1,527,000       2,373,332  
United Microelectronics Corp. *
     3,305,000       1,468,414  
              20,758,589  
                 
Software & Services Industry — 0.6%
                
Addcn Technology Co., Ltd.
     88,000       1,063,478  
                 
Technology Hardware Industry — 4.4%
                
ARBOR Technology Corp.
     515,363       832,641  
Asustek Computer, Inc.
     177,000       1,927,425  
Catcher Technology Co., Ltd.
     287,000       2,429,728  
Ennoconn Corp.
     317,000       2,304,710  
              7,494,504  
TOTAL INFORMATION TECHNOLOGY
             52,992,612  
                 
MATERIALS — 3.4%
                
Metals & Mining Industry — 1.4%
                
Yeong Guan Energy Technology Group Co., Ltd.
     566,160       2,359,953  
Plastic Industry — 2.0%
                
Nan Ya Plastics Corp.
     1,661,000       3,477,916  
TOTAL MATERIALS
             5,837,869  
                 
TEXTILES — 0.9%
                
Textile Industry — 0.9%
                
Makalot Industrial Co., Ltd.
     322,000       1,628,338  
TOTAL TEXTILES
             1,628,338  
                 
WHOLESALE AND RETAIL — 2.1%
                
Trading and Consumers' Goods Industry — 2.1%
                
President Chain Store Corp.
     457,000       3,558,834  
TOTAL WHOLESALE AND RETAIL
             3,558,834  
TOTAL COMMON STOCKS
                
(Cost — $164,186,258)
             167,113,521  
TOTAL INVESTMENTS — 97.6%
                
(Cost — $164,186,258)
             167,113,521  
OTHER ASSETS AND LIABILITIES, NET—2.4%
             4,048,466  
NET ASSETS—100.0%
             171,161,987  
 
Legend:
US $– United States dollar
*
Non-income producing
 
The accompanying notes are an integral part of the schedule of investments.
 
 
 
 
 
Notes to Schedule of Investments (unaudited)
November 30, 2014
 
1. Organization. The Taiwan Fund, Inc. (the “Fund”), a Delaware corporation, is registered under the Investment Company Act of 1940, as amended (the “Act”), as a diversified closed-end management investment fund.
 
The Fund concentrates its investments in the securities listed on the Taiwan Stock Exchange. Because of this concentration, the Fund may be subject to certain additional risks not typically associated with investing in securities of U.S. companies or the U.S. government, including (1) volatility of the Taiwan securities market, (2) restrictions on repatriation of capital invested in Taiwan, (3) fluctuations in the rate of exchange between the NT Dollar and the U.S. Dollar, and (4) political and economic risks. In addition, Republic of China accounting, auditing, financial and other reporting standards are not equivalent to U.S. standards and, therefore, certain material disclosures may not be made, and less information may be available to investors investing in Taiwan than in the United States. There is also generally less regulation by governmental agencies and self-regulatory organizations with respect to the securities industry in Taiwan than there is in the United States.
 
2. Basis of Presentation. The preparation of the Schedule of Investments is in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and requires management to make estimates and assumptions that affect the reported amounts and disclosures in the Schedule of Investments during the reporting period. Management believes the estimates and security valuations are appropriate; however, actual results may differ from those estimates, and the security valuations reflected in the Schedule of Investments may differ from the value the Fund ultimately realizes upon the sale of the securities.
 
Security Valuation. All securities, including those traded over-the-counter, for which market quotations are readily available are valued at the last sales price prior to the time of determination of the Fund’s net asset value per share or, if there were no sales on such date, at the closing price quoted for such securities (but if bid and asked quotations are available, at the mean between the last current bid and asked prices, rather than such quoted closing price). These securities are generally categorized as Level 1 securities in the fair value hierarchy. In certain instances where the price determined above may not represent fair market value, the value is determined in such manner as the Board of Directors (the “Board”) may prescribe. Foreign securities may be valued at fair value according to procedures approved by the Board if the closing price is not reflective of current market values due to trading or events occurring in the valuation time of the Fund. In addition, substantial changes in values in the U.S. markets subsequent to the close of a foreign market may also affect the values of securities traded in the foreign market. These securities may be categorized as Level 2 or Level 3 securities in the fair value hierarchy, depending on the valuation inputs. Short-term investments, having a maturity of 60 days or less are valued at amortized cost, which approximates market value, with accrued interest or discount earned included in interest receivable.
 
The Fund has adopted fair valuation accounting standards which establish a definition of fair value and set out a hierarchy for measuring fair value. These standards require additional disclosures about the various inputs and valuation techniques used to develop the measurements of fair value and a discussion in changes in valuation techniques and related inputs during the period. These inputs are summarized in the three broad levels listed below:
 
• Level 1 – quoted unadjusted prices for identical instruments in active markets to which the Fund has access at the date of measurement.
 
• Level 2 – quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model derived valuations in which all significant inputs and significant value drivers are observable in active markets. Level 2 inputs are those in markets for which there are few transactions, the prices are not current, little public information exists or instances where prices vary substantially over time or among brokered market makers.
 
• Level 3 – model derived valuations in which one or more significant inputs or significant value drivers are unobservable. Unobservable inputs are those inputs that reflect the Fund’s own assumptions that market participants would use to price the asset or liability based on the best available information.
 
Investment in Securities
  
Level 1
    
Level 2
    
Level 3
    
Total
  
Common Stocks^
   $ 167,113,521     $ —     $ —     $ 167,113,521  
Total
   $ 167,113,521     $ —     $ —     $ 167,113,521  
 
^
See schedule of investments for industry breakout.
 
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
 
The Fund’s policy is to disclose transfers between Levels based on valuations at the end of the reporting period. As of November 30, 2014, there were no transfers between Levels 1, 2, or 3 based on the valuation input levels.
 
 
 
 
 
Notes to Schedule of Investments (unaudited) (continued)
November 30, 2014
 
Foreign Currency Translation. The financial accounting records of the Fund are maintained in U.S. dollars. Investment securities, other assets and liabilities denominated in a foreign currency are translated into U.S. dollars at the current exchange rate. Purchases and sales of securities, income receipts and expense payments are translated into U.S. dollars at the exchange rate on the dates of the transactions.
 
Security Transactions. Security transactions are accounted as of the trade date.
 
3.Tax Basis of Investments. Cost of investments for federal income tax purposes is substantially the same as for financial statement purposes. At November 30, 2014, the aggregate cost basis of the Fund’s investment securities for financial reporting purposes was $164,186,258. Net unrealized appreciation of the Fund’s investment securities was $2,927,263 of which $12,737,942 related to appreciated investment securities and $9,810,679 related to depreciated investment securities.
 
 
 
 
 
ITEM 2. CONTROLS AND PROCEDURES

(a)
The registrant’s principal executive and principal financial officers have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”) (17 CFR 270.30a-3(c))) are effective, as of a date within 90 days of the filing date of this Form N-Q that includes the disclosure required by this paragraph, based on their evaluation of the controls and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and Rule 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934 (17 CFR 240.13a-15(b) or 240.15d-15(b)).

(b)
There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17 CFR 270.30a-3(d)) that occurred during the registrant’s last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.

ITEM 3. EXHIBITS
 
The certifications required by Rule 30a-2(a) of the 1940 Act (17 CFR 270.30a-2(a)), are attached as exhibits to this filing.
 
 
 
 
 
SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

THE TAIWAN FUND, INC.

By:
 /s/ Simon J. Crinage  
 
Simon J. Crinage
  
 
President of The Taiwan Fund, Inc.
     
Date:
January 26, 2015
  

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By:
/s/ Simon J. Crinage
  
 
Simon J. Crinage
  
 
President of The Taiwan Fund, Inc.
     
Date:
January 26, 2015
  
     
By:
/s/ William C. Cox
  
 
William C. Cox
  
 
Treasurer of The Taiwan Fund, Inc.
     
Date:
January 26, 2015