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
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THE TAIWAN FUND, INC.
(Exact name of registrant as specified in charter)
2 AVENUE DE LAFAYETTE,
P.O. Box 5049
BOSTON, MA 02206-5049
(Address of principal executive offices)(Zip code)
(Name and Address of Agent for Service) Copy to:
The Taiwan Fund, Inc. Leonard B. Mackey, Jr., Esq.
c/o State Street Bank and Trust Company Clifford Chance US LLP
Attention: Elizabeth A. Watson, 31 West 52nd Street
Assistant Secretary New York, New York 10019
4 Copley Place, 5th Floor
Boston, MA 02116
Registrant's telephone number, including area code: (800) 636-9242
Date of fiscal year end: August 31
Date of reporting period: May 31, 2009
ITEM 1: SCHEDULE OF INVESTMENTS
THE TAIWAN FUND, INC.
Schedule of Investments/May 31, 2009 (Showing Percentage of Net Assets)
(unaudited)
US$
VALUE
SHARES (NOTE a)
--------- ------------
COMMON STOCKS - 86.1%
BASIC INDUSTRIES -- 26.7%
AUTOMOBILES, TIRES & ACCESSORIES -- 1.0%
Yulon Nissan Motor Co., Ltd. 1,370,000 $ 2,399,779
------------
CEMENT -- 1.6%
Asia Cement Corp. 3,500,000 3,936,633
------------
FOOD -- 3.9%
Great Wall Enterprise Co., Ltd. 2,000,339 2,157,677
Uni-President Enterprises Corp. 3,500,000 3,877,476
Wei Chuan Food Corp. * 3,500,000 3,538,667
------------
9,573,820
------------
GLASS -- 1.5%
Taiwan Glass Industrial Corp. 5,500,000 3,794,502
------------
IRON & STEEL -- 2.8%
China Steel Corp. 7,000,000 5,958,728
Tung Ho Steel Enterprise Corp. 1,000,000 1,044,852
------------
7,003,580
------------
PAPER -- 0.2%
Kang Na Hsiung Enterprise Co., Ltd. 1,000,000 588,497
------------
PETROLEUM SERVICES -- 2.0%
Formosa Petrochemical Corp. 2,000,000 5,039,873
------------
PLASTICS -- 2.7%
Formosa Plastics Corp. 2,000,000 3,872,098
Nan Ya Plastics Corp. 2,000,000 2,857,977
------------
6,730,075
------------
RETAIL -- 4.3%
President Chain Store Corp. 2,500,000 6,453,496
Ruentex Industries, Ltd. 4,000,000 4,179,407
------------
10,632,903
------------
RUBBER -- 3.7%
Cheng Shin Rubber Industry Co., Ltd. 4,000,000 6,736,221
TSRC Corp. 2,000,000 2,519,937
------------
9,256,158
------------
TEXTILE -- 1.4%
Far Eastern Textile, Ltd. 3,000,000 3,397,305
------------
TRANSPORTATION -- 1.6%
U-Ming Marine Transport Corp. 800,000 1,659,471
Yang Ming Marine Transport 5,000,000 2,243,358
------------
3,902,829
------------
TOTAL BASIC INDUSTRIES 66,255,954
------------
FINANCE -- 8.5%
FINANCIAL SERVICES -- 8.5%
Cathay Financial Holding Co., Ltd. 4,000,622 6,479,089
First Financial Holding Co., Ltd. 8,000,500 5,372,103
Fubon Financial Holding Co., Ltd. 4,500,000 4,363,025
SinoPac Financial Holdings Co., Ltd. 10,000,000 3,134,555
Taishin Financial Holdings Co., Ltd. 5,000,000 1,805,442
------------
TOTAL FINANCE 21,154,214
------------
US$
VALUE
SHARES (NOTE a)
--------- ------------
TECHNOLOGY -- 50.9%
ELECTRONIC COMPONENTS -- 2.3%
Advanced Power Electronics Corp. 1,000,000 $ 891,197
Kinsus Interconnect Technology Corp. 1,000,000 1,797,760
Silitech Technology Corp. 1,400,000 2,990,120
------------
5,679,077
------------
ELECTRONICS DISTRIBUTION -- 3.0%
Synnex Technology International Corp. 4,500,000 7,370,815
------------
IC DESIGN -- 8.7%
MediaTek, Inc. 1,175,000 14,443,540
Novatek Microelectronics Corp. Ltd. 1,000,878 2,429,875
Orise Technology Co., Ltd. 600,000 1,004,902
RichTek Technology Corp. 525,000 3,654,292
------------
21,532,609
------------
OPTOELECTRONICS -- 4.5%
Au Optronics Corp. 4,000,695 4,130,955
InnoLux Display Corp. 1,600,924 2,226,205
Largan Precision Co., Ltd. 300,000 3,272,845
Motech Industries, Inc. 400,000 1,585,716
------------
11,215,721
------------
OTHER ELECTRONIC -- 6.1%
Hon Hai Precision Industry Co., Ltd. 4,000,874 15,122,924
------------
PC & PERIPHERALS -- 4.8%
Catcher Technology Co. Ltd. 1,500,000 4,245,479
Quanta Computer, Inc. 3,000,000 4,794,026
Quanta Storage, Inc. 2,000,000 2,857,977
------------
11,897,482
------------
SEMICONDUCTOR MANUFACTURING -- 8.5%
Siliconware Precision Industries Co. 2,000,074 2,596,860
Taiwan Semiconductor
Manufacturing Co., Ltd. 10,000,426 18,562,276
------------
21,159,136
------------
TELECOMMUNICATIONS -- 13.0%
Chunghwa Telecom Co., Ltd. 5,000,094 9,526,770
Far EasTone Telecommunications Co., Ltd. 4,300,000 4,955,363
Gemtek Technology Corp. 1,500,000 2,678,201
HTC Corp. 550,000 8,856,655
Taiwan Mobile Co., Ltd. 3,500,000 6,216,868
------------
32,233,857
------------
TOTAL TECHNOLOGY 126,211,621
------------
TOTAL COMMON STOCKS
(Identified Cost -- $164,440,495) 213,621,789
------------
TOTAL INVESTMENTS -- 86.1%
(Cost -- $164,440,495) ** $213,621,789
------------
OTHER ASSETS AND LIABILITIES, NET--13.9% 34,524,373
------------
NET ASSETS--100.0% $248,146,162
============
See Notes to Schedule of Investments. 1
NOTES TO SCHEDULE OF INVESTMENTS
US$ United States Dollar
* Non-income producing
(a) 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). 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 may prescribe. Foreign securities may be valued at
fair value according to procedures approved by the Board of Directors 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. The value of foreign securities may be
adjusted if such movements in the U.S. market exceed a specified
threshold. 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.
** At May 31, 2009, aggregate gross unrealized appreciation for all
securities for which there was an excess of value over financial reporting
cost was $56,281,353 and aggregate gross unrealized depreciation for all
securities for which there was an excess of financial reporting cost over
value was $7,100,059 and net appreciation for financial reporting purposes
was $49,181,294. At May 31, 2009, aggregate cost for financial reporting
purposes was $164,440,495.
The Fund adopted Financial Accounting Standards Board Statement of Financial
Accounting Standards No. 157, Fair Value Measurements ("FAS 157"), effective
September 1, 2008. In accordance with FAS 157, fair value is defined as the
price that the Fund would receive upon selling an investment in a timely
transaction to an independent buyer in the principal or most advantageous market
of the investment. FAS 157 established a three-tier hierarchy to maximize the
use of observable market data and minimize the use of unobservable inputs and to
establish classification of fair value measurements for disclosure purposes.
Inputs refer broadly to the assumptions that market participants would use in
pricing the asset or liability, including assumptions about risk, for example,
the risk inherent in a particular valuation technique used to measure fair value
including such a pricing model and/or the risk inherent in the inputs to the
valuation technique. Inputs may be observable or unobservable. Observable inputs
are inputs that reflect the assumptions market participants would use in pricing
the asset or liability developed based on market data obtained from sources
independent of the reporting entity. Unobservable inputs are inputs that reflect
the reporting entity's own assumptions about the assumptions market participants
would use in pricing the asset or liability developed based on the best
information available in the circumstances.
The three-tier hierarchy of inputs is summarized in the three broad levels
listed below.
- Level 1 - quoted prices in active markets for identical investments
- Level 2 - other significant observable inputs (including quoted prices
for similar investments, interest rates, prepayment speeds, credit
risk, etc.)
- Level 3 - significant unobservable inputs (including the Fund's own
assumptions in determining the fair value of investments)
The inputs or methodology used for valuing securities are not necessarily an
indication of the risk associated with investing in those securities.
The following is a summary of the inputs used as of May 31, 2009 in valuing the
Fund's investments carried at value:
INVESTMENTS
VALUATION INPUTS IN SECURITIES
---------------- -------------
Level 1 - Quoted Prices $ 213,621,789
Level 2 - Other Significant Observable Inputs --
Level 3 - Significant Unobservable Inputs --
-------------
TOTAL $ 213,621,789
=============
In March 2008, FASB issued Statement of Financial Accounting Standards No. 161,
"Disclosures about Derivative Instruments and Hedging Activities" ("SFAS 161").
SFAS 161 is effective for fiscal years and interim periods beginning after
November 15, 2008. SFAS 161 requires enhanced disclosures about fund derivative
and hedging activities. There were no derivative instruments held by the Fund on
May 31, 2009.
In April 2009, FASB issued FASB Staff Position No. 157-4, "Determining Fair
Value When the Volume and Level of Activity for the Asset or Liability Have
Significantly Decreased and Identifying Transactions That Are Not Orderly" ("FSP
157-4"). FSP 157-4 provides additional guidance for estimating fair value in
accordance with SFAS 157, when the volume and level of activity for the asset or
liability have significantly decreased as well as guidance on identifying
circumstances that indicate a transaction is not orderly. FSP 157-4 is effective
for fiscal years and interim periods ending after June 15, 2009. Management is
currently evaluating the impact the adoption of FSP 157-4 will have on the
Fund's disclosures.
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/ Andrew Chen
--------------------------------
Andrew Chen
Principal Executive Officer
President of The Taiwan Fund, Inc.
Date: July 28, 2009
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/ Adelina Louie
--------------------------------
Adelina Louie
Principal Financial Officer
Treasurer of The Taiwan Fund, Inc.
Date: July 28, 2009
By: /s/ Andrew Chen
--------------------------------
Andrew Chen
Principal Executive Officer
President of The Taiwan Fund, Inc.
Date: July 28, 2009