On December 17, 2024, the US Department of Defense (DoD) confirmed the removal of Advanced Micro-Fabrication Equipment Inc. (AMEC) and IDG Capital from its Chinese Military Companies (CMC) list, effective December 13.
Aegiverse is betting big on fiber-optic gyroscopes (FOG) as military demand for resilient navigation systems surges amid growing drone and satellite deployments. The National Central University spinoff, founded in 2022, is pushing into US and Indian markets while deepening ties with Taiwanese defense contractors.
Taiwan has launched the "Defense Innovation Unit" to accelerate the development of dual-use military technologies, with a particular focus on drones and countermeasures. The initiative draws inspiration from the US Defense Innovation Unit (DIU), which collaborates with private tech firms to integrate commercial innovations into defense applications swiftly. Taiwan's Ministry of National Defense aims to replicate this model, fostering collaboration between its military and civilian sectors to modernize defense capabilities and reduce reliance on traditional military frameworks.
Taiwan's emerging drone sector shows promise but faces hurdles in catching up with China's established industry. Recent events demonstrate Taiwan's commitment to growing its drone sector, including the first specialized drone display at the Taipei International Electronics Show (TAITRONICS) in 2024 and the planned drone section at COMPUTEX in 2025.
China's push for semiconductor self-sufficiency, spurred by US restrictions, is yielding dual-use technological advances that span both civilian and defense sectors. Several key developments highlight this trend.
BAE Systems is advancing its position in the commercial space sector through a series of strategic partnerships in Asia-Pacific, marking a significant shift from its traditional defense focus as it seeks to capitalize on the growing regional demand for space capabilities.
The 2024 Taiwan International Assembly of Space Science, Technology, and Industry (TASTI 2024), held from November 30 to December 4 at the Kaohsiung Exhibition Center, witnessed the inaugural participation of a British delegation, which established a "National Pavilion," drawing significant attention from industry stakeholders.
Nearly 60 space companies are showcasing their latest innovations at TASTI Expo 2024, demonstrating Taiwan's growing aerospace capabilities. The Taiwan Space Agency (TASA) leads the exhibition with Formosat-8, featuring locally developed components including optical payload, GPSR, satellite computer, power systems, and communication modules.
The largest US drone maker struggles with supply chain disruption after selling drones to Taiwan's fire departments, with current inventory projected to last until spring 2025.
Neousys Technology has defied the downward trend in the industrial PC (IPC) industry in 2024, achieving solid revenues and profits through its early investments in edge AI computing. As the IPC industry rebounds amid growing AI adoption, chairman James Gau projects sustained growth for the company in 2025.
Taiwan is making a determined push into aerospace as part of its "Five Trusted Industry Sectors" initiative, with the sector reaching NT$133.6 billion (US$4.2 billion) in output, returning to pre-pandemic levels. This industry, deemed critical for national defense and technological advancement, is experiencing a renaissance after the severe disruption of 2020-2022.
Thunder Tiger Technology, a leading drone manufacturer in Taiwan, has revealed impressive achievements at this year's AUSA (Association of the United States Army) Convention and has secured interest from many clients. Additionally, the company is collaborating with Israeli drone optics giant NextVision to expand production.
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.
The Taiwan Drone Excellence Overseas Business Alliance, established in late 2024, has secured Poland as its second "ally" after Oklahoma, US. The partnership aims to advance international drone sales, technology development, supply chain integration, and global competitiveness.
On November 13, the US government announced a non-binding preliminary agreement with Akash Systems. Through the CHIPS and Science Act, the Department of Commerce intends to allocate up to US$18.2 million in funding to support Akash's development of next-generation semiconductor technologies, according to Reuters.
AI, biomedicine, quantum computing, innovative semiconductor materials, and advanced semiconductor manufacturing are shaping up as pivotal areas for Taiwan's future research and development, with profound implications for defense and industry applications. This critical juncture was highlighted by Professor Chuu Chih-sung's groundbreaking creation of the world's smallest quantum computer at National Tsing Hua University's Department of Physics and Center for Quantum Technology.
The global aerospace supply chain faces unprecedented volatility, creating a rare opening for Taiwan and Asia-based manufacturers. Additionally, President-Elect Donald Trump's renewed focus on "protection fees" for Taiwan has raised concern about potential impacts on US-Taiwan military relations.
The first two years under Donald Trump's second term could be "quite impactful" if policy changes are made on tax, deregulation, and crypto, according to Stefan Gratzer, managing director at J.P. Morgan Private Bank.
US defense technology companies are increasingly looking to Taiwan as a critical manufacturing base and supply chain partner, as revealed during a recent Arizona-led trade delegation to Taipei. The mission, which included four emerging defense tech firms, highlights growing bilateral cooperation in aerospace and defense amid rising regional tensions.
Carbon-Based Technology recently delivered its "Albatross II" drone to Taiwan's Chung-Shan Institute of Science and Technology (NCSIST) alongside Air Asia Company Limited (AACL). However, due to budget constraints for next year that have halted production, the company's plans for scaling up the advanced drone are temporarily on hold. Despite the setback, Carbon-Based Technology states it has readied production capacity and will now target high-demand commercial markets in Northeast and Southeast Asia.
As the only Taiwanese exhibitor at the 2024 Association of the United States Army (AUSA) show, Thunder Tiger is strengthening its presence for the second consecutive year, demonstrating notable evolution in its offerings.
Aiseed, a burgeoning startup in the drone sector, is leveraging edge AI technology to carve out its niche in the market. The team recently stated that integrating edge AI into drones will become as indispensable as Full Self-Driving (FSD) systems are for smart vehicles. The surge in military procurement contracts has significantly boosted demand for commercial drones, prompting numerous startups to seize the opportunity to establish a foothold in the global non-restricted supply chain through domestic orders.
The defense sector, once a tightly controlled and exclusive industry with high entry barriers, is opening up amid US-China tensions and rising geopolitical conflicts. This realignment of global supply chains isn't just reshaping the tech sector—it's also creating new opportunities for companies eager to break into the high-margin defense market.
US-Taiwan cooperation on developing an autonomous defense supply chain in the drone sector is accelerating, as two delegations of American drone industry representatives visited Taiwan in late September and early October.
