| Study Period | 2019 - 2030 |
| Base Year For Estimation | 2024 |
| Forecast Data Period | 2025 - 2030 |
| Market Size (2025) | USD 6.81 Billion |
| Market Size (2030) | USD 8.26 Billion |
| CAGR (2025 - 2030) | 3.94 % |
| Market Concentration | High |
Major Players
*Disclaimer: Major Players sorted in no particular order |
Taiwan Defense Market Analysis
The Taiwan Defense Market size is estimated at USD 6.81 billion in 2025, and is expected to reach USD 8.26 billion by 2030, at a CAGR of 3.94% during the forecast period (2025-2030).
Taiwan's defense industry has witnessed robust growth in response to mounting military threats from the People's Republic of China (PRC). The country's defense budget has steadily increased, reaching USD 19.4 billion in 2024. Taiwan's defense investments primarily target military fixed-wing aircraft, naval vessels, and cutting-edge electronic warfare systems, showcasing a clear commitment to modernization and technological advancement.
Given its regional tensions, Taiwan's defense strategy is intricately linked to its geopolitical landscape. The ruling Democratic Progressive Party (DPP) has responded to the PRC's heightened military presence near Taiwan by extending conscription and restructuring the ROC Army. These actions highlight the nation's emphasis on maintaining a robust defense infrastructure. On the other hand, geopolitical issues, economic uncertainty, limited geographical size, and strategic depth hampers market growth.
A notable trend in Taiwan's defense market is the pivot toward asymmetric warfare. This shift involves investments in missile systems, mine warfare, and advanced radar technologies to counterbalance potential adversaries' numerical advantage. The expanding defense budget and the prolonged compulsory military service present lucrative opportunities for defense contractors and technology providers.
Taiwan Defense Market Trends
The Armament Segment Will Showcase Remarkable Growth During the Forecast Period
Taiwan has consistently upgraded its military arsenal in response to regional security shifts. The nation's primary focus is bolstering its asymmetric warfare capabilities, which involve harnessing innovative tactics to counterbalance potential threats from larger military entities. Taiwan has made significant strides in its armament sector in recent years, demonstrating a clear commitment to modernizing and strengthening its defense. For example, By February 2024, Taiwan had amassed a substantial procurement backlog valued at USD 20.5 billion. This backlog encompasses various armaments, ranging from M1A2T Abrams Tanks and HIMARS defense systems to Air-Launched Harpoon Missiles and F-16 Munitions.
Moreover, in June 2024, the US greenlit a potential deal for Taiwan, entailing the sale of over a thousand loitering munitions. This USD 300 million contract includes 720 Switchblade 300 and 291 ALTIUS 600M variants. These loitering munitions, akin to small unmanned aerial vehicles, carry explosives that detonate upon impact. Notably, Ukraine's military has extensively employed such munitions against Russian forces. These munitions significantly offer tactical flexibility for Taiwan when more conventional strike capabilities are compromised.
These procurements underscore Taiwan's ongoing commitment to enhancing its rapid response and fire support capabilities. Additionally, the nation has earmarked a defense budget for 2024, focusing on acquiring new fighter jet models and enhancing anti-air and anti-surface defenses. Furthermore, in July 2024, Taiwan inked a USD 341.4 million deal with the US for infrared search and track (IRST) pods destined for its Lockheed Martin F-16V Block 70/72 Viper fleet. This contract includes not only IRST systems but also 16 additional items. Such developments drive the segment growth in the coming years.
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The Aerial Segment is Expected to Dominate the Market During the Forecast Period
Taiwan's defense sector significantly emphasizes its military aerial segment, driven by strategic imperatives and technological advancements. This segment encompasses various activities, from developing and producing military aircraft to maintaining and operating unmanned aerial vehicles (UAVs). Key factors propelling Taiwan's military aviation industry include regional security dynamics, particularly the perceived threat from China, and the imperative to modernize its armed forces. Given Taiwan's geopolitical challenges, the nation has prioritized a robust self-defense strategy, emphasizing air superiority and surveillance. This translates into a defense strategy that heavily leans on developing and acquiring cutting-edge military aircraft, helicopters, and drones, all aimed at deterring potential aggression and safeguarding national security.
Recent strides in Taiwan's military aviation underscore a commitment to bolstering capabilities and ensuring operational readiness. For example, with a substantial USD 2.2 billion investment, Taiwan's Aerospace Industrial Development Corporation (AIDC) has spearheaded the creation of indigenous aircraft, notably the T-5 Brave Eagle advanced jet trainer. This aircraft is slated for full deployment to the Taiwanese Air Force by 2026. By December 2023, AIDC had supplied 27 of the planned 66 T-5A Brave Eagle Advanced Jet Trainers to the Taiwanese Air Force. The T-5A, or the T-BE5A, replaces Taiwan's aging AIDC AT-3 trainers and Northrop F-5E/F Tiger II fighters. Thus, growing investment in enhancing aerial capabilities and procuring next-generation fighter jets drive market growth across the country.
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Taiwan Defense Industry Overview
The Taiwan defense market is dominated by a select few players, with the National Chung-Shan Institute of Science and Technology (NCSIST), Aerospace Industrial Development Corporation, Lungteh Shipbuilding Co. Ltd, Jong Shyn Shipbuilding Co. Ltd., and Thunder Tiger Corporation standing out as key entities.
Leading original equipment manufacturers (OEMs), including CSBC Corporation, the National Chung-Shan Institute of Science and Technology, and Jong Shyn Shipbuilding Company, play a pivotal role. They boost Taiwan's strategic autonomy and spearhead the development of crucial military assets, such as the Hai Kun-class Indigenous Defense Submarine (IDS) and F-16V fighter jets. This concerted effort toward indigenous capabilities underscores Taiwan's strategic shift to reduce reliance on international suppliers, fortifying its national security.
Taiwan Defense Market Leaders
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National Chung-Shan Institute of Science and Technology
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Aerospace Industrial Development Corporation
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Lungteh Shipbuilding Co., Ltd.
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Jong Shyn Shipbuilding Co. Ltd.
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Thunder Tiger Corporation
- *Disclaimer: Major Players sorted in no particular order
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Taiwan Defense Market News
- April 2024: In a missile defense drill in Pingtung County, Taiwan, the surface-launched variant of the domestically produced Tien Chien II (TC-2) missile completed its test-firing. The drill at the Jiupeng Base, managed by Taiwan's National Chung-Shan Institute of Science and Technology (NCSIST), witnessed four TC-2 missiles launched. These missiles effectively struck target drones positioned 10 kilometers away.
- March 2024: Taiwan's National Chung-Shan Institute of Science and Technology (NCSIST) developed a 50-kilowatt laser weapon. This weapon is designed to neutralize enemy missiles and drones. Furthermore, the laser can be mounted on CM-32 Clouded Leopard armored vehicles, enhancing mobility and range.
Taiwan Defense Industry Segmentation
The Taiwan defense market report covers a detailed analysis of the country’s defense sector, encompassing various aspects such as military budgets, equipment procurement, indigenous defense production, defense OEMs, and security policies. The report focuses on Taiwan’s defense market and analyzes different aerial, naval, and land platforms.
The Taiwan defense market is segmented by equipment type (personal training and protection, communication, armament, and transport) and platform (terrestrial, aerial, and naval). The report offers the market size in value terms in USD for all the abovementioned segments.
| Equipment Type | Personal Training and Protection |
| Communication | |
| Armament | |
| Transport | |
| Platform | Terrestrial |
| Aerial | |
| Naval |
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Taiwan Defense Market Research FAQs
How big is the Taiwan Defense Market?
The Taiwan Defense Market size is expected to reach USD 6.81 billion in 2025 and grow at a CAGR of 3.94% to reach USD 8.26 billion by 2030.
What is the current Taiwan Defense Market size?
In 2025, the Taiwan Defense Market size is expected to reach USD 6.81 billion.
Who are the key players in Taiwan Defense Market?
National Chung-Shan Institute of Science and Technology, Aerospace Industrial Development Corporation, Lungteh Shipbuilding Co., Ltd., Jong Shyn Shipbuilding Co. Ltd. and Thunder Tiger Corporation are the major companies operating in the Taiwan Defense Market.
What years does this Taiwan Defense Market cover, and what was the market size in 2024?
In 2024, the Taiwan Defense Market size was estimated at USD 6.54 billion. The report covers the Taiwan Defense Market historical market size for years: 2019, 2020, 2021, 2022, 2023 and 2024. The report also forecasts the Taiwan Defense Market size for years: 2025, 2026, 2027, 2028, 2029 and 2030.
Taiwan Defense Industry Report
Statistics for the 2025 Taiwan Defense market share, size and revenue growth rate, created by Mordor Intelligence™ Industry Reports. Taiwan Defense analysis includes a market forecast outlook for 2025 to 2030 and historical overview. Get a sample of this industry analysis as a free report PDF download.
