Taiwan signed agreements with 27 foreign firms on investments totaling NT$108.25 billion (US$3.42 billion) in the island over the next two years, mostly in the optoelectronics and panel-making sectors, the Ministry of Economic Affairs said Tuesday.

The deals came shortly after Taiwan and China signed a landmark trade agreement that went into effect Sept. 12. The Taiwan government believes the pact, which removed most of the barriers to cross-strait trade and investment, as well as warming ties between the two sides will boost the island's economic growth.

The majority of the investments will come from the U.S., the ministry said in a statement. Eight U.S. companies, including Hewlett-Packard Co. (HPQ), Qualcomm Inc. (QCOM), Corning Inc. (GLW), Applied Materials Inc. (AMAT) and Super Micro Computer Inc. (SMCI), will invest a total of NT$72.2 billion over the period, it said.

A spokesman at the ministry, who asked not to be named, said earlier Tuesday H-P would invest US$114 million on research and development in Taiwan, without giving further details. H-P wasn't immediately available for comment.

The other investors are from Japan, China and Hong Kong, Germany, the U.K., Australia, the Netherlands, Spain and Belgium.

Japanese companies account for the second-biggest group of investors, with companies inclduing Canon Inc. (7751.TO), Nippon Electric Glass Co. (5214.TO) and Asahi Glass Co. (5201.TO) pledging a total of NT$29 billion, the ministry said.

U.K.-based GlaxoSmithKline PLC (GSK) and Standard Chartered PLC (STAN.LN), Spain's Banco Bilbao Vizcaya Argentaria SA (BBVA) and Chinese state-owned conglomerate Beijing Holdings Ltd. are also among the foreign investors, the statement added.

The ministry said the island's optoelectronics and panel-making sectors attracted investment pledges of NT$94.1 billion, or 87% of the total planned investment, followed by cloud-computing technology, which attracted NT$6.92 billion.

Taiwan and China signed the Economic Cooperation Framework Agreement in June, which came after several years of increasing economic ties and warming relations, though China hasn't ruled out the use of force to reunite Taiwan with the Chinese mainland.

Taiwan's export-oriented economy recovered from the global financial crisis with year-on-year growth in the first quarter this year reaching a 32-year high, but the momentum is slowing amid uncertainties about the strength of the global recovery.

The island's gross domestic product grew 12.5% in the second quarter from a year earlier, following year-on-year growth of 13.7% in the first quarter. The growth rates prompted the government to raise its full-year GDP growth forecast to 8.24% from 6.14%, though as the revised figure remained in single-digit territory despite the strong growth in the first six months of the year, the government likely expects economic growth to slow significantly in the second half.

-By Aries Poon, Dow Jones Newswires; 886-2-25022557; aries.poon@dowjones.com
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