Taiwanese private companies are venturing into the defense sector to produce weapons and military equipment as China’s military might increases.

Existing details: Many Taiwanese companies, previously involved in manufacturing electronics, are now transitioning to defense manufacturing.
* Hwa Meei Optical, a company that currently manufactures recreational eyewear, plans to enter the defense sector to produce shatterproof, bullet-resistant eyewear for the military.
* Drone company Geosat is partnering with Taiwan’s military to build 3,000 military-use drones, capable of being mounted with guns or dropping bombs, by next year.

The motivation: With the heightened military tension in the Asia Pacific region, Taiwan is looking to improve its defensive capabilities.
* Taiwan, which is claimed by China as its own territory, has been intensifying its military drills and extended its mandatory military conscription period.
* Due to China’s rise in military capacity, Taiwan’s military is relaxing its procurement rules which were previously quite strict, allowing private companies to develop dual-use technologies.

The collaboration: Taiwan is considering collaboration with U.S. defense contractors to equip itself better.
* Taiwanese companies argue they can produce some of the components of weapons systems Taiwan buys primarily from the U.S., thereby alleviating delays in weapon delivery.
* A U.S. treaty signed requires it to help Taiwan defend itself, however, issues such as delays in weapon delivery and concerns about Chinese government infiltration in Taiwan pose challenges.

Implications for U.S. defense contractors:
* Shifting operations to Taiwan could mean high revenue for U.S. defense contractors who, in addition to selling complex weapons systems, also get paid to service and maintain these systems.
* However, concerns about security risk and potential for Chinese espionage have resulted in push back from American defense companies, and many key technologies and manufacturing equipment are not allowed to leave the U.S.

Taiwan’s historical shift: Taiwan’s companies, which experienced a boom in the 1970s manufacturing cheap plastic and electronic components, now aim to leverage this expertise in the defense sector.
* In addition to electronics companies, other Taiwanese companies like Shern Yeong Precise Optical, which produces high-end glass and optical components, are moving into defense.
* Companies are also factoring in the necessity to create “China-free” defense supply chains, substituting Chinese-made parts in their supply chain with parts sourced from the European Union.

View original article on NPR

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