Amid concerns over potential shifts in US military engagement following President-Elect Donald Trump's election victory, Taiwan is accelerating efforts to bolster its defense capabilities. President Lai Ching-te has identified defense as one of five key trusted industries, with plans to build an autonomous military supply chain centered on critical technologies including drone development.
Defense sector expansion
The island's defense budget is expected to exceed NT$550 billion (US$17.5 billion) by 2025, creating significant opportunities across multiple sectors including drone manufacturing, aviation systems, engine forging, and autonomous aircraft maintenance. In a bold move, the government aims to expand drone production value tenfold to NT$30 billion by 2028, capitalizing on Taiwan's robust domestic manufacturing capabilities.
Strategic industrial development
Aerospace Industrial Development Corp. (AIDC) is leading Taiwan's push to secure international drone orders, addressing critical gaps in global supply chains. The company has placed particular emphasis on forging technology, an essential component in engine production currently dominated by a select group of international suppliers. Industry experts view the enhancement of Taiwan's forging capabilities and aviation systems as crucial steps toward achieving defense autonomy.
Supply chain localization
AIDC has intensified its research and development efforts in critical components including landing gear, fuel tanks, and various system elements to enhance domestic aircraft production capabilities. As Taiwan continues to increase its procurement of US military equipment, industry analysts emphasize the importance of localizing manufacturing and maintenance operations, noting that this approach would strengthen the domestic supply chain while boosting long-term defense capabilities.
