Taiwan receives 98% of its defence equipment imports from the US, reveals a report by Strategic Defence Intelligence (SDI).
Titled ‘Future of the Taiwanese Defense Industry – Market Attractiveness, Competitive Landscape and Forecasts to 2021, the report forecasts that the US will continue to be the biggest defence exporter to Taiwan through 2021.
The report claims that pressure from the People's Republic of China caused the US to delay deliveries to the country in 2011, following which Taiwan began importing engines from Germany. Taiwan’s defence imports reached an all-time high in 2014 due to increased procurement of air defence systems, missiles, and aircraft.
SDI forecasts that imports will continue to grow from 2016-2021 and be led by foreign military sales by the US, while other countries are reluctant to supply defence equipment due to pressure from the PRC.
The report also highlights recent FMS transactions, such as a $1.8bn major arms sales package by the US in December 2015. The package includes two frigates, AAV-7 amphibious vehicles, 2B anti-tank and surface-to-air missiles, and C4ISR systems.
According to the report, foreign original equipment manufacturers (OEMs) have a significant opportunity to enter the Taiwanese market, as the country has limited domestic defence capabilities.
Although the US dominates the Taiwanese defence industry, a number of European suppliers have recently entered the market through the sale of advanced defence systems.