UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

October 1, 2004
Date of report (Date of earliest event reported)

The Taiwan Fund, Inc.

(800) 426-5523
(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing of obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Table of Contents

Item 7.01. Regulation FD Disclosure.

     Pursuant to Regulation FD Rules 100-103, The Taiwan Fund, Inc. (the “Fund”) furnishes the October 2004 Monthly Review of the Fund’s performance by the Fund’s investment adviser.

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SIGNATURES

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

Dated: December 23, 2004

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THE TAIWAN FUND, INC. REVIEW
October 2004

Portfolio Review

Market overview and portfolio performance
The Taiwan Stock Exchange Index (the “TAIEX”) fell 0.7% in U.S. dollar terms in October, following a 1.38% drop in September. The market’s weakness was largely attributable to the worse-than-expected third quarter earnings results announced by the technology firms and weaker-than-anticipated guidance for the remainder of 2004 and for 2005. A greater than anticipated interest rate increase by the Central Bank of Taiwan also added negative sentiment to the market. In terms of fund flows, foreign investors remained net buyers in the amount of US$1.28 billion in October, ahead of the Morgan Stanley Capital International (“MSCI”) re-weighting changes with respect to the Taiwan market at the end of November, while local mutual funds and proprietary trades turned net sellers of US$213 million and US$51 million, respectively. In terms of sector performance, the technology sector fell for the second consecutive month, dropping by 1.7% in October as a result of disappointing earnings results for the third quarter and weak guidance for the fourth quarter. The worse performing portions of the technology sector included foundry and Thin Film Transistor-Liquid Crystal Display (“TFT-LCD”), as a result of falling utilization rate and pricing erosion due to inventory digestion. The banking sector was the best performing sector, advancing 4.5% during the month, followed by the industrial and retail sectors with respective gains of 2.6% and 1.1% during the month. In October, the Fund outperformed the TAIEX by 0.4% due to the Fund’s under-weighting of TFT-LCD and over-weighting of downstream IT hardware. During the month, our over-weighting in the telecommunications sector and under-weighting in semiconductors and plastics were based on our conservative view on the market outlook.

Market outlook and portfolio strategy
We expect the TAIEX to continue a consolidation trading range through the end of 2004, with potential upward movement driven by healthy domestic demand and the industrial cyclical shares. Other then these two factors, we expect positive foreign inflows due to the upcoming MSCI re-weighting in Taiwan. However, we still hold a neutral view on technology shares. In terms of valuations, the recent market correction resulted in undemanding valuations of the TAIEX, with the market trading at a price-to-earnings multiple of 12.8 times in October, compared to 13.2 times in September, which is still at the lower band of historical trading range. Our strategy is to reduce the weighing of cyclical growth stocks on any share rebound and move to defensive sectors in the near-to-mid terms. For the longer-term strategy, we will increase weighting in domestic demand consumption plays, while continue to hold our downstream technology blue-chip stocks with sustainable earnings, and increase exposure in small-caps stock with steady growth.

Total Fund Sector Allocation

Total Net Assets: US$209.82 Million

Top 10 Holdings of Total Fund Portfolio

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Returns in US$ (%)*

** The Fund’s fiscal year commences on September 1.

Premium/Discount of TWN

Market Data

The daily NAV of the Fund is available from Lipper and CDA Weisenberger, or you may obtain it by calling toll free (800) 636-9242.

Lead Fund Manager: Victor Shih
Deputy Fund Manager: Sally Chang

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