Taiwan - Country Commercial Guide
Aerospace and Defense

This is a best prospect industry sector for this country.  Includes a market overview and trade data.

Last published date: 2020-09-25


The aerospace industry is strategic for national development due to its industrial interdependence and cooperation across multiple sectors.  Taiwan’s aerospace and defense sectors achieved significant milestones in 2019.  Foreign procurement, indigenous jet trainer production, and international cooperation drove the growth of the market.  The domestic aerospace and defense industry boasts design and development capabilities; however, more technologically advanced equipment still needs to be imported from the U.S. This will present growing business opportunities in the coming years for U.S. firms.

In August 2019, the U.S. government formally approved to the sale of 66 F-16 Block-70 fighter jets to Taiwan.  This sale was achieved through the U.S. Foreign Military Sales program, with a budget of up to US$8 billion approved by the Taiwan Legislative Yuan.  Taiwan’s Air Force currently operates 142 F-16 A/B fighter jets.  After the delivery of the newly procured 66 F-16 fighter jets by 2026, the Taiwan Air Force will rank as one of the largest fleets of F-16s in the region, with over 200 F-16 fighters in operation.

In December 2019, the Aerospace Industrial Development Corp. (AIDC), Taiwan’s largest aerospace manufacturer, signed a strategic cooperation alliance with Lockheed Martin to develop Taiwan into a Maintenance, Repair and Overhaul (MRO) center for Taiwan and the region’s F-16 fighter jets.  AIDC has obtained Lockheed Martin’s certification to manufacture 23 F-16 components.

In recent years, Taiwan has been aggressively pursuing defense self-sufficiency by developing its indigenous defense industry.  Another remarkable stride in 2019 was that AIDC, supported by a team of over 118 local subcontractors and several U.S. firms, rolled out its first prototype of the Advanced Jet Trainer (AJT) which is a twin-engine subsonic aircraft powered by the Honeywell F124 engine for the Taiwan Air Force.  AIDC plans to build a total of 66 jet trainers by 2028 with a budget of over US$2.28 billion.  The company is scheduled to test fly its first AJT in late 2020.  The spillover effect of localized production and the maintenance of these military aircraft programs will benefit the civil sectors and is expected to create substantial long-term benefits for Taiwan aerospace and defense companies. 

Taiwan has over 180 small and medium-sized aerospace manufacturing companies, and in 2019, their revenue was US$4.5 billion, an 9.4% increase from 2018.  60% of the local production was in MRO and the remaining 40% in manufacturing (18% military and civil 22%).  AIDC accounted for 60% of Taiwan’s aerospace production.  Taiwan has a complete range of MRO capabilities for civilian and military aircraft.  In addition to AIDC, Air Asia and EGAT are major players.  Led by AIDC, Taiwan has established itself in the OEM market and maintenance supply chain in the fields of engine casing, turbine blades, aircraft fasteners, composite material structures, air cargo containers, cockpit instrument panels, and the conversion of passenger aircraft to cargo aircraft. 

In 2019, total U.S. aerospace exports to Taiwan exceed US$2.9 billion dollars and comprised about 1.8% of U.S. aerospace exports overall.  Taiwan ranked as the United States’ 13th largest aerospace exports market according to data from the U.S. Census Bureau.  The Taiwan aerospace market continues to offer excellent prospects for U.S. products, services, and technology.

Like their counterparts worldwide, Taiwan’s airlines, airports and the aerospace manufactures have been negatively affected by the COVID-19 pandemic.  As the overall severity and duration of the pandemic are still uncertain, the industry is seeking short-term bailout packages from the government.  Under these circumstances, it’s forecast, the aerospace market in Taiwan is likely to see a downturn in 2020 and likely rebound the years ahead as the global travel and economy rebounds.

Taiwan Aerospace and Global Market (2017-2019)     Unit: USD thousands





2020 (E)

Total Market Size





Total Local Production





Total Exports





Total Imports





Imports from the U.S.



$2, 914,000


Exchange Rate:  USD1





Total Market Size = (Total Local Production + Total Imports) – (Total Exports)

Source: Committee for Aviation Industry Development, Ministry of Economic Affairs; Bureau of Foreign Trade, Ministry of Economic Affairs; U.S. Census Bureau, U.S. Department of Commerce.

Taiwan Defense Procurements (2017-2019)       Unit: USD thousands





Domestic Tenders

7,189 cases

7,418 cases

7,728 cases

$2.97 billion 

$4.01 billion

$1.85 billion

Direct Commercial Sales

33 cases

27 cases

40 cases

$469 million

$ 1 billion

$0.16 billion

Foreign Military Sales


33 cases

26 cases

24 cases

$1.33 billion

$783 million

$10.25 billion


7,260 cases

7,471 cases

7,720 cases

$4.769 billion

$5.793 billion

$12.26 billion

Source:  The Armaments Bureau, Ministry of National Defense 

Airport Construction

With a land area of 22,370 square miles, Taiwan has four international airports, and 13 regional and military airports.  The island has the highest density of airports in the world.  Before the outbreak of COVID-19, Taiwan had 96 international airlines operating 326 flights routes that connect 150 cities in 2019.  Taiwan airports handled a record-setting 72 million passengers in 2019.  To meet future demand, a third terminal at the Taoyuan International Airport (T3 Project) is under construction, with a total budget exceeding US$3.1 billion.  A third runway will be built to accommodate larger aircraft.  Based on construction scale and investment cost, the T3 Project is the single largest construction project in Taiwan.  A consortium of Netherlands Airport Consultants B.V. (NACO), TY Lin International, and Parson Brinckerhoff International Inc. is planning the T3 Area Development project.  Roger Stirk Harbour & Partners is the designer of the main terminal building, which is expected to accommodate 45 million passengers annually after its completion in 2026.  Currently, Taiwan is continuing to upgrade its airports’ communication, navigation and surveillance systems, and air traffic management.  These developments offer new opportunities for U.S. businesses to supply airport equipment and services in Taiwan.

Leading Sub-Sectors

Taiwan’s aerospace market continues to generate demand for U.S. products, services, and technology because its civilian and military aircraft fleet consists largely of American-made aircraft.  Taiwan presents opportunities for U.S. companies in the subsectors of aircraft MRO, avionics systems, missile and space vehicle parts, radar and surveillance devices, cybersecurity, raw materials, unmanned aerial vehicles, and airport equipment and services.  The increased demand for U.S. manufactured aircraft parts is driven by Taiwan’s military aircraft modernization programs, including the F-16 Block 20, E 2-C, and C-130.

Web Resources

Trade Shows

Held every two years, TADTE is Taiwan’s sole trade event for military and civilian aerospace products and technology. 

Relevant Authorities

U.S. firms interested in learning more about the Aerospace and Defense market and seeking to expand their export opportunities to Taiwan are encouraged to contact CS Taiwan Commercial Specialist Wendy Tien at Wendy.Tien@trade.gov or visit our website.