Defense industry of Taiwan explained

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

Early

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

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.

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

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]

Land vehicles

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.

Maritime industry

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.[25]

The vessels are usually constructed by the shipyards and weapon installation done by NCSIST afterwards. Famous examples include Tuo Chiang-class corvette, Panshih-class fast combat support ship, and Yushan-class landing platform dock.[26] Moreover, Taiwan is building on the Hai Kun-class submarine to create a fleet of new diesel attack submarines.[27] Domestically produced minelayers were inducted into service in 2022.[28]

Law and regulation

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.

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.[29]

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.[30]

Exports

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.[31] Taiwanese SOEs have not exported any major high-end weapons systems but the Taiwanese Government is becoming more open to the idea.[32] Private companies have been more successful, with Lungteh Shipbuilding supplying multiple generations of the Multipurpose Assault Craft to the Philippines.[33] [34] The Taiwanese government has expressed increasing interest in supplying high end weapons systems and components to "like-minded democracies".[35] [36]

Dual use items

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.[37] 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.[38]

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.[39] Taiwanese components were also found in the wreckage of a North Korean KN-23 or KN-24 ballistic missile purchased from Russia and fired at Ukraine, a small minority of the 270 foreign components identified.[40] 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.[41]

Trade shows

The Taipei Aerospace & Defense Technology Exhibition is the primary Taiwanese defense industry trade show, it is held biennially.[42]

See also

Further reading

Notes and References

  1. Web site: Matt Schrader . Ned Collins-Chase . David An . Taiwan's Indigenous Defense Industry: Centralized Control of Abundant Suppliers . globaltaiwan.org . Global Taiwan Institute . 9 January 2020 . 21 June 2022 . https://web.archive.org/web/20220621000916/https://globaltaiwan.org/wp-content/uploads/2018/05/GTI-TW-Indig-Defense-Occasional-Report-May-2018-final.pdf . dead .
  2. Web site: Turton . Michael . Notes from Central Taiwan: Taiwan's shrinking middle ground . taipeitimes.com . 31 July 2023 . Taipei Times . 31 July 2023 . 30 July 2023 . https://web.archive.org/web/20230730183753/https://www.taipeitimes.com/News/feat/archives/2023/07/31/2003803999 . live .
  3. News: Taiwan still haunted by stories of secret arms . Wendell . Minnick . 11 August 2001 . Taipei, Taiwan . 1563-9525 . The Liberty Times group . . Editorials . 14 April 2021 . https://web.archive.org/web/20210414171709/http://www.taipeitimes.com/News/editorials/archives/2001/08/11/0000098097 . 8 .
  4. Book: Fitzpatrick, Mark . Chapter Three: Taiwan . Asia's Latent Nuclear Powers: Japan, South Korea and Taiwan . 10.4324/9781351223744 . https://books.google.com/books?id=Z0g4DwAAQBAJ&pg=PT79 . . 978-1-351-22372-0 . . 2017 . London, England, United Kingdom . 79–112 .
  5. Web site: Taiwan's Modest Defense Industries Program . https://web.archive.org/web/20170123214031/https://www.cia.gov/library/readingroom/docs/CIA-RDP04T00447R000100590001-9.pdf . dead . January 23, 2017 . www.cia.gov . Central Intelligence Agency . 9 January 2020.
  6. News: Hamacher . Fabian . 2022-07-06 . Taiwan touts new air force advanced training jet's abilities . en . Reuters . 2022-07-10 . 2022-07-09 . https://web.archive.org/web/20220709073020/https://www.reuters.com/business/aerospace-defense/taiwan-touts-new-air-force-advanced-training-jets-abilities-2022-07-06/ . live .
  7. News: Taiwan's friends aid stealthy submarine project as China threat rises . en . Reuters . 2022-07-10 . 2021-12-20 . https://web.archive.org/web/20211220163611/https://www.reuters.com/investigates/special-report/taiwan-china-submarines/ . live .
  8. Web site: Taiwan passes extra $8.6bn defence budget as China threat grows . 2022-07-10 . www.aljazeera.com . en . 2022-07-10 . https://web.archive.org/web/20220710202232/https://www.aljazeera.com/news/2022/1/11/taiwan-passes-extra-defence-budget-as-china-threat-grows . live .
  9. Web site: 2019-10-14 . Meet the New Military-Industrial Complex in Taiwan . 2024-02-21 . Voice of America . en.
  10. Web site: Tien-pin . Lo . Chin . Jonathan . Talent shortage hampers military projects: official . www.taipeitimes.com . 15 August 2021 . Taipei Times . 1 November 2021 . 15 September 2023 . https://web.archive.org/web/20230915173625/https://www.taipeitimes.com/News/front/archives/2021/08/15/2003762620 . live .
  11. Web site: Everington . Keoni . Taiwan's Revolver 860 combat drones being used by Ukrainians on battlefield . taiwannews.com.tw . 18 August 2022 . Taiwan News . 29 September 2022 . 4 October 2022 . https://web.archive.org/web/20221004214106/https://www.taiwannews.com.tw/en/news/4630475 . live .
  12. Web site: Taiwan Sends Ukraine Over 800 Bomber Drones . kyivpost.com . 26 August 2022 . Kyiv Post . 29 September 2022 . 26 August 2022 . https://web.archive.org/web/20220826113836/https://www.kyivpost.com/russias-war/taiwan-sends-ukraine-over-800-bomber-drones.html . live .
  13. Web site: Lin . Sean . Asymmetrical warfare focus has Taiwan drone companies upping the ante . focustaiwan.tw . 10 September 2022 . 30 September 2022 . 30 September 2022 . https://web.archive.org/web/20220930034057/https://focustaiwan.tw/sci-tech/202209100016 . live .
  14. Web site: Staff Writer . Drone makers eye combat models . taipeitimes.com . 13 September 2022 . Taipei Times . 30 September 2022 . 30 September 2022 . https://web.archive.org/web/20220930034054/https://www.taipeitimes.com/News/taiwan/archives/2022/09/13/2003785233 . live .
  15. Web site: Military research unit unveils Taiwan-made 'suicide drone'. focus taiwan. 14 March 2023. Wu Sheng-hung and Joseph Yeh. 19 March 2023. 19 March 2023. https://web.archive.org/web/20230319115105/https://focustaiwan.tw/politics/202303140009. live.
  16. Web site: LEE . YIMOU . POMFRET . JAMES . LAGUE . DAVID . Inspired by Ukraine war, Taiwan launches drone blitz to counter China . reuters.com . Reuters . 27 July 2023 . 27 July 2023 . https://web.archive.org/web/20230727160339/https://www.reuters.com/investigates/special-report/us-china-tech-taiwan/ . live .
  17. Web site: Jui . Chia-Wei . Wu . Vyra . Taiwan's strategic response to achieve self-sufficiency in drone component production . digitimes.com . 4 October 2023 . Digitimes . 18 February 2024 . 18 February 2024 . https://web.archive.org/web/20240218205840/https://www.digitimes.com/news/a20231003PD209/drone-taiwan-ministry-of-national-defense.html . live .
  18. Web site: Liao . Chloe . Wu . Vyra . Transitioning EV tech to drones, Taiwan's self-sufficiency at 70% . digitimes.com . 4 September 2023 . Digitimes . 18 February 2024 . 18 February 2024 . https://web.archive.org/web/20240218205904/https://www.digitimes.com/news/a20230904PD208/taiwan-defense-geosat-ict-manufacturing.html . live .
  19. Web site: Tien-pin . Lo . Missile production to hit delivery peak . taipeitimes.com . Taipei Times . 25 June 2023 . 25 June 2023 . https://web.archive.org/web/20230625170518/https://www.taipeitimes.com/News/front/archives/2023/06/26/2003802164 . live .
  20. Web site: Yi-chang . Lin . Chin . Jonathan . UAV market key for Taiwan: experts . taipeitimes.com . Taipei Times . 7 August 2024.
  21. Web site: Du . Eric . VIEWPOINT: Business Opportunities for U.S. Defense Firms Abound in Taiwan . www.nationaldefensemagazine.org . National Defense Magazine . 9 January 2020 . 16 September 2023 . https://web.archive.org/web/20230916031440/https://www.nationaldefensemagazine.org/articles/2019/11/6/viewpoint-business-opportunities-for-us-defense-firms-abound-in-taiwan . live .
  22. Web site: Everington . Keoni . Defense bill calls for joint US-Taiwan production of weapons . taiwannews.com.tw . 13 June 2023 . Taiwan News . 13 June 2023 . 13 June 2023 . https://web.archive.org/web/20230613044254/https://www.taiwannews.com.tw/en/news/4917291 . live .
  23. Web site: 2018-05-14 . Taiwan keen to boost domestic defence industry amid rising tension with Beijing . 10 January 2020 . www.scmp.com . Associated Press . Associated Press . 2023-09-15 . https://web.archive.org/web/20230915173636/https://www.scmp.com/news/china/diplomacy-defence/article/2146014/taiwan-keen-boost-domestic-defence-industry-amid-rising . live .
  24. Web site: Feng . Emily . Taiwan's companies make the world's electronics. Now they want to make weapons . npr.org . NPR . 7 September 2023 . 6 September 2023 . https://web.archive.org/web/20230906175257/https://www.npr.org/2023/08/18/1186919198/taiwan-military-weapons-manufacturing-industry . live .
  25. Web site: Wei Shu and Elizabeth Hsu . Liao Yu-yang . Taiwan's national defense industry to create 8,000 jobs: president . focustaiwan.tw . 25 February 2019 . Focus Taiwan . 21 February 2020 . 16 September 2023 . https://web.archive.org/web/20230916031440/https://focustaiwan.tw/politics/201902250020 . live .
  26. Web site: DOMINGUEZ . GABRIEL . New transport ship highlights Taiwan's improving defense industry . japantimes.co.jp . 3 October 2022 . Japan Times . 18 February 2024 . 18 February 2024 . https://web.archive.org/web/20240218205838/https://www.japantimes.co.jp/news/2022/10/03/asia-pacific/taiwan-domestic-weapons-production/ . live .
  27. Web site: Tien-pin . Lo . Chin . Jonathan . Submarine prototype could be ready ahead of schedule . taipeitimes.com . 2 April 2023 . Taipei Times . 30 May 2023 . 30 May 2023 . https://web.archive.org/web/20230530213256/https://www.taipeitimes.com/News/front/archives/2023/04/02/2003797167 . live .
  28. Web site: Taiwan adds minelaying ships to defenses against China . defensenews.com . 14 January 2022 . Defense News . 18 February 2024.
  29. Web site: Grevatt . Jon . Taiwan looks to incentivise foreign investment in defence . www.janes.com . Janes . 17 January 2020 . 5 July 2019 . https://web.archive.org/web/20190705184450/https://www.janes.com/article/89685/taiwan-looks-to-incentivise-foreign-investment-in-defence . live .
  30. Web site: Chien-ling . Liu . Kao . Evelyn . Taiwan expands list of export control items to Russia and Belarus . focustaiwan.tw . 7 February 2024 . Focus Taiwan . 7 February 2024 . 7 February 2024 . https://web.archive.org/web/20240207141100/https://focustaiwan.tw/business/202402070021 . live .
  31. Web site: Chin . Johnathan . Thousands of T91 rifles sold in US in one day: report . www.taipeitimes.com . 23 April 2017 . Taipei Times . 9 January 2020 . 27 January 2018 . https://web.archive.org/web/20180127202433/http://www.taipeitimes.com/News/taiwan/archives/2017/04/23/2003669273 . live .
  32. Web site: Ferry . Timothy . Growing Pains in Taiwan's Defense Sector . topics.amcham.com.tw . The American Chamber of Commerce . 10 January 2020 . 2019-11-14 . 2020-04-21 . https://web.archive.org/web/20200421051124/https://topics.amcham.com.tw/2019/11/taiwan-defense-sector/ . live .
  33. Web site: 17M Multi-Purpose Attack Craft . www.lts.com.tw . Lung Teh . 29 June 2020 . 1 February 2020 . https://web.archive.org/web/20200201055756/http://www.lts.com.tw/LungTeh/en/project/143/ . live .
  34. Web site: 15M Multi-Purpose Attack Craft . www.lts.com.tw . Lung Teh . 29 June 2020 . 2 November 2019 . https://web.archive.org/web/20191102224806/http://www.lts.com.tw/LungTeh/en/project/54/ . live .
  35. Web site: Staff Writer . Taiwan might be arms supplier: Tsai . www.taipeitimes.com . 16 December 2020 . Taipei Times . 16 December 2020 . 15 December 2020 . https://web.archive.org/web/20201215204806/https://www.taipeitimes.com/News/front/archives/2020/12/16/2003748795 . live .
  36. Web site: Taiwan suggests it could become an arms supplier for the West as it launches new warship. CNBC News. 15 December 2020. Reuters. 20 March 2023. 20 March 2023. https://web.archive.org/web/20230320233219/https://www.cnbc.com/2020/12/15/taiwan-suggests-it-could-become-an-arms-supplier-for-the-west.html. live.
  37. Web site: Qi . Ciel . Taiwan's bargaining chips? . techcrunch.com . 2 December 2021 . Tech Crunch . 18 February 2024 . 18 February 2024 . https://web.archive.org/web/20240218205838/https://techcrunch.com/2021/12/02/taiwans-bargaining-chips/ . live .
  38. Web site: Oung . Angelica . No TSMC chips in China arms: MOEA . taipeitimes.com . 9 April 2021 . Taipei Times . 18 February 2024 . 18 February 2024 . https://web.archive.org/web/20240218205839/https://www.taipeitimes.com/News/front/archives/2021/04/09/2003755356 . live .
  39. Web site: Fornusek . Martin . Most of 2,500 foreign components Ukraine found in Russian weapons come from US (GRAPHS) . kyivindependent.com . 19 December 2023 . Kyiv Independent . 18 February 2024 . 19 January 2024 . https://web.archive.org/web/20240119005256/https://kyivindependent.com/ukraine-launches-database-of-foreign-components-found-in-russian-weapons/#:~:text=Ukrainian%20authorities%20found%20at%20least,over%2012%2C000%20kilometers%20per%20hour. . live .
  40. Web site: North Korean missile relies on recent electronic components . storymaps.arcgis.com . Conflict Armament Research . 20 February 2024.
  41. Web site: Hetherington . William . Taiwan is fueling Russia’s war: report . taipeitimes.com . Taipei Times . 26 February 2024.
  42. Web site: Minnick . Wendell . Taiwan Defense Show Exhibits New Weapons . www.defensenews.com . 12 August 2015 . Defense News . 27 January 2020.

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