"We're still very optimistic about WiMax," said Chen Chao-yi, director general of Taiwan's Industrial Development Bureau, at a meeting on Friday.

His optimism appears misplaced amid a load of bad news for the WiMax industry over the past few months.

Nortel Networks, a major WiMax player, filed for bankruptcy protection last month and said it would stop developing mobile WiMax. Major WiMax vendor, Motorola, reported a massive 2008 net loss of US$4.2 billion and said it will lay off 4,000 workers. At the same time, several big WiMax backers, including chip giant Intel, Time Warner Cable, and Google, reduced by hundreds of millions of dollars the value of their investments in Clearwire, a company building a WiMax network across the U.S.

Financial troubles have hit WiMax in Taiwan as well.

Late last year, money problems at First International Telecom (Fitel), forced the company to dump plans to roll out a WiMax network in the capital city, Taipei. The network would have been the biggest so far on the island. Now government officials say Fitel may have to sell its WiMax license and offload its network.