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Holiday shopping: The next big thing in Taiwan?

A look behind the booming business of e-books. It's a page turner.

People pose for photographs inside a snow globe shaped Christmas decoration outside a shopping mall in downtown Taipei, Dec. 18, 2009. (Nicky Loh/Reuters)

TAIPEI, Taiwan — It's one of the hottest items on America's holiday gift list. And no one is hoping for an e-book in every stocking more than the Taiwanese.

If the e-book holiday hype becomes reality, some of the island's tech firms stand to reap huge profits.

The government here is pushing e-books too, hoping they'll be the next big thing for Taiwan's fabled tech sector, after semiconductors, PCs and flat-panel displays.

Taiwanese contract electronics firms assemble most of the popular e-books such as Amazon's Kindle and Sony's Reader. The island's Prime View International already makes more than 90 percent of the "e-paper" display modules used in such e-books. Another Taiwan firm — AU Optronics — makes much of the rest.

If PVI's planned acquisition of Cambridge, Mass.-based E-Ink goes through as planned by the end of the year, it will also own the key technology that's helping power the current e-book tsunami. recently announced that the Kindle was its best-selling and "most gifted" product. Computer firms are crowding into the market with new e-books; the latest entry, Taiwan brand BenQ's "nReader."

The government recently announced it would offer generous subsidies to firms developing e-reader technologies, according to the Associated Press.

It's also working with the Chinese government to develop a standard for the potentially massive Chinese-language e-book market, the report said.

The government has already spent some $10 million to $15 million per year since 2006 to fund a "flexible electronics" center, according to John Chen, vice president at Taiwan's government-backed tech incubator ITRI.

"Flexible display electronics is going to be next major trend, and that's going to help the mobility of displays, including those for e-books," said Chen.

He said Taiwan is facing competition in the development of new technologies from Korea and Japan, as well as a U.S. display industry consortium.

"Everyone's eyeing the opportunity to get in on the huge potential for the e-paper market, especially for e-books," he said.