Upon Donald Trump's return to the presidency, Taiwan's overseas expansion strategies are attracting significant attention. Jyh-Huei Kuo, Taiwan's Minister of Economic Affairs (MOEA), recently highlighted the opportunities for collaboration between Taiwan and the US in aerospace technology. It will be the top priority for both Taiwan and the US in the future to strengthen partnerships in the aerospace sector.
In recent years, the aerospace supply chain has faced unprecedented pressure, making it one of the few industries unaffected by economic fluctuations. Taiwan-based manufacturers, sensing lucrative opportunities, are increasingly targeting this sector. Quaser, the prominent machine tool manufacturer, has also revealed that demand visibility for its aerospace orders already extends to the end of 2025.
Industry analysts note that Trump's return to the White House could elevate aerospace and defense industries as the priorities of the US. As Taiwan also sees the defense and aerospace sectors as one of the five key "trusted industries", it would offer the substantial potential to enhance Taiwan-US collaboration.
Kuo underscored Taiwan's potential to establish a strong aerospace supply chain presence in the US. In addition to collaborating with American aerospace giants, there are plans to relocate some R&D centers to the US and to pursue drone industry partnerships with Japan.
The aerospace sector thus has become one of the few industries, alongside semiconductors and ICT, receiving clear guidance from Taiwan's government on strategic development.
The post-pandemic recovery in aviation demand, coupled with the replacement of aging aircraft, has further boosted the aerospace supply chain. Despite global disruptions caused by the pandemic, which forced many suppliers out of business, the subsequent rebound in demand has led to a tightening supply situation.
While Boeing has faced scrutiny over a series of incidents in recent years, its market dominance alongside Airbus remains unchallenged, with the two companies controlling 80% of the global market. Reports suggest a combined backlog of 15,000 aircraft orders. China Airlines has also indicated that supply chain delays mean the global aircraft shortage may persist until 2028.
From the supply chain perspective, stable demand is evident. Quaser recently stated that aerospace remains a highly dependable sector, with strong market demand anticipated through 2025. Startin Hsieh, CEO of Quaser, noted that the company sees the most consistent and promising growth in aerospace, with visibility for aerospace-related orders already extending to year-end.
Aerospace applications currently account for about 50% of Quaser's revenue, with precision machining, automotive, and mold-making comprising 30%, and the remainder derived from semiconductors, medical equipment, and energy. The company reported a record-breaking revenue of NT$3.24 billion (approx. US$102 million) for 2024, a 16.97% year-over-year increase. Looking ahead to 2025, Quser expects continued double-digit growth, driven primarily by aerospace and US market demand, which includes aerospace, energy, and automotive sectors.
Apart from the demand for new aircraft, delivery delays for new planes are forcing airlines to focus on maintaining their current fleets, increasing reliance on aftermarket services and maintenance.
Aerospace supplier Magnate anticipates a sustained increase in aircraft maintenance parts shipments over the next three to five years. Benefiting from concurrent demand for new aircraft and spare parts, the company projects total revenue for 2024 to reach NT$1.41 billion, an 18% year-over-year increase.