Assessing Innovation, Sustainability, and Market Performance in Taiwan's Semiconductor Sector: Insights From ESG-Driven Analysis

This study examines the relationship between ESG sub-indicators and the performance of Taiwan's semiconductor industry from 2016 to 2020. Using a combination of data envelopment analysis, truncated regression, and classification and regression trees, the research evaluates the influence of 12 ESG factors on innovation, sustainability, and market performance. The findings reveal that midstream manufacturers lead in innovation and market performance, while upstream manufacturers excel in sustainability. Corporate governance transparency emerges as the most critical factor driving overall performance, followed by employee management, product quality, and stakeholder treatment. Conversely, greenhouse gas emissions and waste management have limited impact due to high costs and regulatory challenges. The study highlights the need for firms to balance ESG strategies with performance goals, emphasizing energy management and governance as key levers for innovation and competitiveness. This research provides practical insights into optimizing ESG implementation to enhance performance across the semiconductor value chain.