Defense industry of Taiwan

Taiwanese President Tsai Ing-wen sits in an AIDC T-5 prototype at rollout NCSIST Albatross 9717 on display at CKS Memorial Hall Chien Hsiang Loitering munition designed by NCSIST

The defense industry of Taiwan is a strategically important sector and a significant employer. They primarily supply weapons and platforms to the Republic of China Armed Forces with few major weapons systems exported abroad. Taiwanese defense industry has produced fighter aircraft, missile systems, surface ships, radars, rocket artillery, armored vehicles, and small arms.[1]

## History

[edit]

ROCA CS/MPQ-90 Bee Eye manufactured by NCSIST

### Early

[edit]

From 1825 until 1866 a shipyard in Tainan produced warships for the Qing navy. Logging for warship production was one of the impetus for the Qing's colonial expansion into Taiwan's mountainous interior.[2]

During the Japanese colonial period a chemical weapons factory was in operation in North Taiwan; the Nationalists took possession of this facility following the conclusion of World War II and are believed to have expanded the facility.[3] Taiwan no longer has a chemical weapons industry.[4]

### Modern

[edit]

The defense sector was invigorated following the recognition of the PRC by the United States in 1979 and the subsequent uncertainty this injected into the US-Taiwan relationship. The KMT government aimed to eventually achieve full self sufficiency in weapons systems.[5] During that period, Taiwan made the IDF fighter in which is playing the role of rapid response towards PLA fighters approaching.

In 2014 the Aerospace Industrial Development Corporation was privatized with the government retaining a 39% stake and the National Chung-Shan Institute of Science and Technology was made an administrative corporation of the government rather than a constituent of the Armaments Bureau.[citation needed]

Under DPP President Tsai Ing-wen, there was a renewed focus on indigenous manufacturing, particularly of air and naval defense.[6][7] President Tsai has also increased the military budget.[8]

Taiwan's defense industry has seen significant growth, aligning with the ruling party's goals set in 2014 to revitalize domestic weapons production. Recent milestones include the unveiling of a fighter jet trainer prototype and the initiation of Taiwan's first homegrown submarine project. These developments not only contribute to Taiwan's economy but also enhance its self-defense capabilities. The government has matched military needs with local companies' capabilities and has steadily increased the defense budget, with 2020 marking a record high.[9]

In 2021 Ministry of National Defense launched an initiative to recruit foreign workers to permanent jobs in Taiwan to address local talent shortages. The initiative also aims to address disruption stemming from the churn of contracted foreign technicians and advisors.[10]

In 2022, 800 combat drones manufactured by DronesVision were transferred to Ukraine through Poland for use during the Russian invasion of Ukraine.[11][12]

Taiwanese company JC Tech has created a "Taiwanese Switchblade" suicide drone called the Flyingfish.[13][14] After a while, NCSIST also demonstrated a loitering munition made indigenously.[15] Following the widespread use of drones in the Russian invasion of Ukraine, the official drone development program was expanded to include non-state owned companies as prime contractors for the first time. The government views drones as a destabilizing technology whose adoption would allow Taiwan to asymmetrically counter the threat from the PLA.[16] The government has designated both drone and drone component manufacturing as strategic industrial focuses.[17] In 2023 Taiwanese drone component manufacturing self sufficiency stood at 70-80%.[18]

Missile production is extensive with annual production surpassing 1,000 units in 2023, this included the Wan Chien, HF-2E, and HF-3 among others.[19] The government and private manufacterers have been eying the global market as a way to build enough scale in the drone industry to effectively compete with China.[20]

## Manufacturers

[edit]

The National Chung-Shan Institute of Science and Technology, the Armaments Bureau, and the Aerospace Industrial Development Corporation are the only three Taiwanese defense manufacturing firms with the capabilities of a full defense prime.[21] For naval systems there are three major shipbuilders and more than a half dozen active shipyards.[22] In addition to the big defense firms there are more than 200 small and medium businesses involved in the defense industry.[23] As the Taiwanese military budget increases many Taiwanese firms which did not formerly make defense products have explored the market, interest was particularly piqued following the Russian invasion of Ukraine.[24] Following the Russian invasion of Ukraine the Taiwanese military bought significant quantities of civilian grade drones including from Taiwan UAV, Taiwan's oldest private drone manufacturer.[25]

### Land vehicles

[edit]

See also: Armaments Bureau

Taiwan's domestic vehicle industry supplies the ROC Army with armored personnel transport and some light vehicles. Famous examples include the CM-12 tank, CM-21 armored vehicle, and CM-32 armoured vehicle.[citation needed]

### Maritime industry

[edit]

Yushan-class landing platform dock

See also: Maritime industries of Taiwan

The major shipbuilders, CSBC Corporation, Taiwan, Jong Shyn Shipbuilding Company, and Lungteh Shipbuilding, all build military and coast guard vessels.[1] Military and Coast Guard orders make up a large portion of shipbuilders books by dollar value. Between the Taiwanese Navy and the Coast Guard Administration Taiwan spends approximately a billion dollars a year on new vessel construction.[26]

The vessels are usually constructed by the shipyards and weapon installation done by NCSIST afterwards.[citation needed] Famous examples include Tuo Chiang-class corvette, Panshih-class fast combat support ship, and Yushan-class landing platform dock.[27] Moreover, Taiwan is building on the Hai Kun-class submarine to create a fleet of new diesel attack submarines.[28] Domestically produced minelayers were inducted into service in 2022.[29]

## Law and regulation

[edit]

In 2019 the Legislative Yuan passed the National Defense Industry Development Act which among other things instructed the Ministry of National Defense to evaluate prospective defense companies and rank them in three tiers based on their technological capability, the size of their operations and their experience in researching, developing, manufacturing and maintaining military equipment, as well as their track record working with academia, businesses or foreign companies.[citation needed]

Later in 2019 the Legislative Yuan passed a bill which encourages foreign direct investment in the defense industry and other ”strategic” industries. The bill allows foreign investors in these sectors to claim "special tax rates" and also tax rebates of up to half their tax bill.[30]

The Taiwanese government restricts the export of dual use items to certain countries. In 2023 Taiwan placed additional restrictions on machine tool exports to Russia and Belarus in response to reports that certain Taiwanese machine tool manufacturers were playing a key part in Russia's war effort.[31]

## Exports

[edit]

T91 manufactured by the 205th Arsenal T112 manufactured by the 205th Arsenal Philippine Navy Multipurpose Assault Craft Mk2

The T65 and T91 assault rifles have been widely exported to many nations with the upper receiver for the T91 been sold on the US civilian market.[32] Taiwanese SOEs have not exported any major high-end weapons systems but the Taiwanese Government is becoming more open to the idea.[33] Private companies have been more successful, with Lungteh Shipbuilding supplying multiple generations of the Multipurpose Assault Craft to the Philippines.[34][35] The Taiwanese government has expressed increasing interest in supplying high end weapons systems and components to "like-minded democracies".[36][37]

### Dual use items

[edit]

Taiwan manufactures many of the "military grade" computer chips that are used by the American military-industrial complex, especially high performance ones. TSMC manufactured computer chips power the Lockheed Martin F-35 fighter. TSMC has faced pressure from the US government to move more of its military chip production to the United States.[38] There have been reports of Taiwanese produced chips being used in Chinese missiles, although these reports have been disputed by the Taiwanese Ministry of Economic Affairs.[39]

Ukrainian engineers claimed to have found numerous commercial off-the-shelf Taiwanese components in Russian weaponry used in the Russo-Ukrainian war, including five on the Kh-47M2 Kinzhal. Taiwanese components were also found in the ZALA Lancet loitering munition, Kh-101 cruise missile, and Ka-52 attack helicopter.[40] Taiwanese components were also found in the wreckage of a North Korean Hwasong-11A (KN-23) (or Hwasong-11B, American name KN-24) ballistic missile purchased from Russia and fired at Ukraine, a small minority of the 270 foreign components identified.[41] Significant quantities of nitrocellulose (used in gunpowder production) from Taiwanese producers have made its way to Russia during the war, primarily through traders in Turkey.[42]

## Trade shows

[edit]

The Taipei Aerospace & Defense Technology Exhibition is the primary Taiwanese defense industry trade show, it is held biennially.[43]

## See also

[edit]

* Defense industry of Israel
* Defense industry of Russia
* Defense industry of Japan
* Maritime industries of Taiwan
* Thunder Tiger
* Taiwan and weapons of mass destruction

## References

[edit]

1. ^ a b David An; Matt Schrader; Ned Collins-Chase. "Taiwan's Indigenous Defense Industry: Centralized Control of Abundant Suppliers" (PDF). globaltaiwan.org. Global Taiwan Institute. Archived from the original (PDF) on 21 June 2022. Retrieved 9 January 2020.
2. ^ Turton, Michael (31 July 2023). "Notes from Central Taiwan: Taiwan's shrinking middle ground". taipeitimes.com. Taipei Times. Archived from the original on 30 July 2023. Retrieved 31 July 2023.
3. ^ Minnick, Wendell (11 August 2001). "Taiwan still haunted by stories of secret arms". Editorials. Taipei Times. Taipei, Taiwan: The Liberty Times group. p. 8\. ISSN 1563-9525. Archived from the original on 14 April 2021.
4. ^ Fitzpatrick, Mark (2017). "Chapter Three: Taiwan". Asia's Latent Nuclear Powers: Japan, South Korea and Taiwan. London, England, United Kingdom: Routledge. pp. 79–112\. doi:10.4324/9781351223744. ISBN 978-1-351-22372-0 - via Google Books.79-112&rft.pub=Routledge&rft.date=2017&rft_id=info:doi/10.4324/9781351223744&rft.isbn=978-1-351-22372-0&rft.aulast=Fitzpatrick&rft.aufirst=Mark&rft_id=https://books.google.com/books?id=Z0g4DwAAQBAJ&pg;=PT79&rfr_id=info:sid/en.wikipedia.org:Defense+industry+of+Taiwan" class="Z3988">
5. ^ "Taiwan's Modest Defense Industries Program" (PDF). www.cia.gov. Central Intelligence Agency. Archived from the original (PDF) on January 23, 2017. Retrieved 9 January 2020.
6. ^ Hamacher, Fabian (2022-07-06). "Taiwan touts new air force advanced training jet's abilities". Reuters. Archived from the original on 2022-07-09. Retrieved 2022-07-10.
7. ^ "Taiwan's friends aid stealthy submarine project as China threat rises". Reuters. Archived from the original on 2021-12-20. Retrieved 2022-07-10.
8. ^ "Taiwan passes extra $8.6bn defence budget as China threat grows". www.aljazeera.com. Archived from the original on 2022-07-10. Retrieved 2022-07-10.
9. ^ "Meet the New Military-Industrial Complex in Taiwan". Voice of America. 2019-10-14. Retrieved 2024-02-21.
10. ^ Tien-pin, Lo; Chin, Jonathan (15 August 2021). "Talent shortage hampers military projects: official". www.taipeitimes.com. Taipei Times. Archived from the original on 15 September 2023. Retrieved 1 November 2021.
11. ^ Everington, Keoni (18 August 2022). "Taiwan's Revolver 860 combat drones being used by Ukrainians on battlefield". taiwannews.com.tw. Taiwan News. Archived from the original on 4 October 2022. Retrieved 29 September 2022.
12. ^ "Taiwan Sends Ukraine Over 800 Bomber Drones". kyivpost.com. Kyiv Post. 26 August 2022. Archived from the original on 26 August 2022. Retrieved 29 September 2022.
13. ^ Lin, Sean (10 September 2022). "Asymmetrical warfare focus has Taiwan drone companies upping the ante". focustaiwan.tw. Archived from the original on 30 September 2022. Retrieved 30 September 2022.
14. ^ Staff Writer (13 September 2022). "Drone makers eye combat models". taipeitimes.com. Taipei Times. Archived from the original on 30 September 2022. Retrieved 30 September 2022.
15. ^ "Military research unit unveils Taiwan-made 'suicide drone'". focus taiwan. Wu Sheng-hung and Joseph Yeh. 14 March 2023. Archived from the original on 19 March 2023. Retrieved 19 March 2023.
16. ^ LEE, YIMOU; POMFRET, JAMES; LAGUE, DAVID. "Inspired by Ukraine war, Taiwan launches drone blitz to counter China". reuters.com. Reuters. Archived from the original on 27 July 2023. Retrieved 27 July 2023.
17. ^ Jui, Chia-Wei; Wu, Vyra (4 October 2023). "Taiwan's strategic response to achieve self-sufficiency in drone component production". digitimes.com. Digitimes. Archived from the original on 18 February 2024. Retrieved 18 February 2024.
18. ^ Liao, Chloe; Wu, Vyra (4 September 2023). "Transitioning EV tech to drones, Taiwan's self-sufficiency at 70%". digitimes.com. Digitimes. Archived from the original on 18 February 2024. Retrieved 18 February 2024.
19. ^ Tien-pin, Lo. "Missile production to hit delivery peak". taipeitimes.com. Taipei Times. Archived from the original on 25 June 2023. Retrieved 25 June 2023.
20. ^ Yi-chang, Lin; Chin, Jonathan. "UAV market key for Taiwan: experts". taipeitimes.com. Taipei Times. Retrieved 7 August 2024.
21. ^ Du, Eric. "VIEWPOINT: Business Opportunities for U.S. Defense Firms Abound in Taiwan". www.nationaldefensemagazine.org. National Defense Magazine. Archived from the original on 16 September 2023. Retrieved 9 January 2020.
22. ^ Everington, Keoni (13 June 2023). "Defense bill calls for joint US-Taiwan production of weapons". taiwannews.com.tw. Taiwan News. Archived from the original on 13 June 2023. Retrieved 13 June 2023.
23. ^ "Taiwan keen to boost domestic defence industry amid rising tension with Beijing". www.scmp.com. Associated Press. Associated Press. 2018-05-14. Archived from the original on 2023-09-15. Retrieved 10 January 2020.
24. ^ Feng, Emily. "Taiwan's companies make the world's electronics. Now they want to make weapons". npr.org. NPR. Archived from the original on 6 September 2023. Retrieved 7 September 2023.
25. ^ Yu-ching, Sun; Hiciano, Lery. "Taiwan, US eye drone cooperation: FT". taipeitimes.com. Taipei Times. Retrieved 25 September 2024.
26. ^ Wei Shu and Elizabeth Hsu, Liao Yu-yang (25 February 2019). "Taiwan's national defense industry to create 8,000 jobs: president". focustaiwan.tw. Focus Taiwan. Archived from the original on 16 September 2023. Retrieved 21 February 2020.
27. ^ DOMINGUEZ, GABRIEL (3 October 2022). "New transport ship highlights Taiwan's improving defense industry". japantimes.co.jp. Japan Times. Archived from the original on 18 February 2024. Retrieved 18 February 2024.
28. ^ Tien-pin, Lo; Chin, Jonathan (2 April 2023). "Submarine prototype could be ready ahead of schedule". taipeitimes.com. Taipei Times. Archived from the original on 30 May 2023. Retrieved 30 May 2023.
29. ^ "Taiwan adds minelaying ships to defenses against China". defensenews.com. Defense News. 14 January 2022. Retrieved 18 February 2024.
30. ^ Grevatt, Jon. "Taiwan looks to incentivise foreign investment in defence". www.janes.com. Janes. Archived from the original on 5 July 2019. Retrieved 17 January 2020.
31. ^ Chien-ling, Liu; Kao, Evelyn (7 February 2024). "Taiwan expands list of export control items to Russia and Belarus". focustaiwan.tw. Focus Taiwan. Archived from the original on 7 February 2024. Retrieved 7 February 2024.
32. ^ Chin, Johnathan (23 April 2017). "Thousands of T91 rifles sold in US in one day: report". www.taipeitimes.com. Taipei Times. Archived from the original on 27 January 2018. Retrieved 9 January 2020.
33. ^ Ferry, Timothy (2019-11-14). "Growing Pains in Taiwan's Defense Sector". topics.amcham.com.tw. The American Chamber of Commerce. Archived from the original on 2020-04-21. Retrieved 10 January 2020.
34. ^ "17M Multi-Purpose Attack Craft". www.lts.com.tw. Lung Teh. Archived from the original on 1 February 2020. Retrieved 29 June 2020.
35. ^ "15M Multi-Purpose Attack Craft". www.lts.com.tw. Lung Teh. Archived from the original on 2 November 2019. Retrieved 29 June 2020.
36. ^ Staff Writer (16 December 2020). "Taiwan might be arms supplier: Tsai". www.taipeitimes.com. Taipei Times. Archived from the original on 15 December 2020. Retrieved 16 December 2020.
37. ^ "Taiwan suggests it could become an arms supplier for the West as it launches new warship". CNBC News. Reuters. 15 December 2020. Archived from the original on 20 March 2023. Retrieved 20 March 2023.
38. ^ Qi, Ciel (2 December 2021). "Taiwan's bargaining chips?". techcrunch.com. Tech Crunch. Archived from the original on 18 February 2024. Retrieved 18 February 2024.
39. ^ Oung, Angelica (9 April 2021). "No TSMC chips in China arms: MOEA". taipeitimes.com. Taipei Times. Archived from the original on 18 February 2024. Retrieved 18 February 2024.
40. ^ Fornusek, Martin (19 December 2023). "Most of 2,500 foreign components Ukraine found in Russian weapons come from US (GRAPHS)". kyivindependent.com. Kyiv Independent. Archived from the original on 19 January 2024. Retrieved 18 February 2024.
41. ^ "North Korean missile relies on recent electronic components". storymaps.arcgis.com. Conflict Armament Research. Retrieved 20 February 2024.
42. ^ Hetherington, William. "Taiwan is fueling Russia's war: report". taipeitimes.com. Taipei Times. Retrieved 26 February 2024.
43. ^ Minnick, Wendell (12 August 2015). "Taiwan Defense Show Exhibits New Weapons". www.defensenews.com. Defense News. Retrieved 27 January 2020.

## Further reading

[edit]

* Nolan, Janne E. (1986). Military Industry in Taiwan and South Korea. New York: Palgrave Macmillan. ISBN 978-1-349-18116-2.
* Bitzinger, Richard A. (2003). Towards a Brave New Arms Industry?. London: Routledge. ISBN 0-19-852835-3.

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