Author: Joseph O'Connor

Weekly Arms Update: 3/11/26

Authors: Joe O’Connor & Shikhar Chaturvedi

This week: the Kuomintang releases its budget proposal, leading to a flurry of statements about special budgets; the MND confirms Abrams tanks are en route to Taiwan; Minister Koo confirms an LOA for HIMARS was received; and the ministry releases budget details on NCSIST domestic production, alongside weekly bids and solicitations.

KMT Releases Proposal + Special Budget Updates

On Thursday, 5 March, the opposition Kuomintang (KMT) party released its special defense budget proposal, after weeks of internal debate as to the amount. The proposal allocates NT$380 billion (US$11.93 billion) specifically to fund the eight U.S. arms sale cases announced in December and would require additional special budget requests for future procurement to be submitted to the Legislative Yuan. Additional reporting on Friday revealed that the request was NT$30 billion (US$940 million) higher than party leadership had planned for; with the KMT also mandating that Letters of Offer and Acceptance, which outline payment and delivery schedules, be issued and signed before funds are appropriated.

Immediately after, the Lai administration began issuing statements opposing the proposal and clarifying their own. The same day, 5 March, the MND issued a statement clarifying that three sales from December (the Taiwan Tactical Network, AH-1W SuperCobra spare parts, and Harpoon missile refurbishment) were not included in the special budget and would be in annual defense budgets. The next day, 6 March, Minister of National Defense Wellington Koo spoke to the press, stating that the KMT’s requirement that all sales be completed by December 2028 is unreasonable and impossible. On Saturday, 7 March, the MND issued a second statement, specifically discussing the KMT requirement of having LOAs before funding is approved, stating that cases follow a formal acquisition timeline and that public disclosure of budget items only occurs after U.S. congressional notification.

On Sunday, 8 March, President Lai visited Jieyun Temple in Banqiao District, New Taipei, giving a speech where he compared his special defense budget to installing a security system against a “bad neighbor.” Lai also argued for the reasonableness of his budget, comparing it to yearly defense spending by Japan and South Korea, both of which are more than his planned NT$1.25 trillion (US$40 billion) in spending over eight years. Also on Sunday, when asked by CNA if the U.S. would support the KMT’s proposal, an unnamed State Department official stated that they “encourage all parties in Taiwan’s legislature to work through political differences and quickly pass a special defense budget,” not taking a partisan side on the issue.

Today, the Legislative Yuan held elections for committee “convening members,” legislators who serve as co-chairs and who control the agenda and legislative review, electing DPP legislator Chen Kuan-ting and KMT legislator Ma Wen-jun to the Foreign Affairs and National Defense Committee, which is tasked with review of the three special budget proposals. Chen, on Monday, met with former U.S. INDOPACOM commander Admiral John Aquilino, discussing Indo-Pacific security, domestic defense production, and advocating for the Lai administration’s budget to pass quickly.

Abrams Tanks “At Sea,” Expected by End of March

An MND official told CNA on Tuesday that the final batch of 28 M1A2T Abrams tanks is “at sea,” en route to Taiwan, with delivery expected before the end of March. The first batch of 38 tanks arrived in December 2024 and was commissioned into the Army’s 584^th Combined Arms Brigade in October. A second batch of 42 tanks, which arrived in July 2025, is still undergoing training and is expected to be commissioned by mid-year. This marks the last out of 108 total tanks that Taiwan began procuring in July 2019.

LOAs for HIMARS Received + MQ-9B Clarification

On Tuesday, Minister of National Defense Wellington Koo told the press that the MND had received a fourth Letter of Offer and Acceptance (LOA) from the U.S., for the sale of 82 High Mobility Artillery Rocket Systems (HIMARS) and associated munitions, worth NT$127.2 billion (US$4.05 billion), initially being notified in December. This LOA, which has a deadline of 26 March to be signed, joins three prior LOAs, for Paladin self-propelled howitzers, Javelin anti-armor missiles, and TOW-2B anti-armor missiles, that have not been signed by the MND owing to ongoing special budget negotiations and are in danger of expiry. On Thursday, 5 March, however, it was reported that the Taiwan People’s Party (TPP), the KMT’s fellow opposition party in the LY, will allow the three previous LOAs, which expire on March 15, to be signed if they are reported immediately to the LY. As of the time of writing, however, we are not aware of those three LOAs having been signed.

While speaking to the press on Tuesday, Minister Koo also clarified ongoing rumors about delays in the delivery of four MQ-9B SeaGuardian maritime surveillance drones to Taiwan, stating that the ongoing conflict in the Middle East has no effect on delivery timelines to Taiwan and that the MND continues to interface with U.S. partners if that were to change.

MND Releases NCSIST Production Budget Request

Taiwan’s Ministry of National Defense has begun releasing additional budget details tied to the National Chung-Shan Institute of Science and Technology (NCSIST), offering a clearer picture of how Taipei intends to scale domestic weapons production under the proposed NT$1.25 trillion “Defense Resilience and Asymmetric Capabilities” special budget. Per Central News Agency reporting, the MND explained that NT$80.9 billion (US$2.55 billion) of the package will fund NCSIST mass production programs, including NT$36.1 billion (US$1.14 billion) for the Strong Bow missile system, NT$16.8 billion (US$529 million) for the Rui Yuan II surveillance drone program, and NT$28 billion (US$881.7 million) for production of “small suicide unmanned surface vessels.”

The newly released figures reinforce a trend visible across Taiwan Security Monitor’s backlog and acquisition analysis: Taiwan is increasingly pairing U.S. arms purchases with expanded domestic production capacity anchored by NCSIST. Previous special budgets (such as the Sea and Air Combat Power Improvement Plan) already used this model to accelerate missile and unmanned platform production while strengthening Taiwan’s industrial supply chain. Taiwan Security Monitor’s December 2025 update on the Arms Sales Backlog showed a growing shift in U.S. arms packages toward asymmetric capabilities that are cheaper and faster to produce. The new NCSIST allocations suggest Taiwan is now extending that logic domestically, using local production to scale asymmetric systems while relying on Foreign Military Sales (FMS) programs for higher-end platforms.

Weekly Awards/Solicitations

On Thursday, the Armaments Bureau’s 209^th Factory awarded an NT$480 million (US$15.09 million) contract to the Armaments Bureau’s 202^nd Factory for base section maintenance of 40-mm remote-controlled turret systems, which feature on Clouded Leopard infantry fighting vehicles. The contract will be fulfilled in Jiji Township, Nantou County.

On Monday, the Naval Specialty Training Center, Naval Education and Training Command, awarded an NT$180 million (US$5.66 million) contract to NCSIST for the repair of “Sea Chain IV” training simulators. We estimate this may be some sort of tactical data link. The contract will be fulfilled in the southern region of Taiwan.

On Wednesday, the 192^nd Fleet, Naval Command, the ROCN’s minesweeping force, awarded an NT$51.21 million (US$1.61 million) contract to NCSIST for comprehensive mine inspection and maintenance of various mines, including maintenance of MK 6 mine projectiles. The contract will be fulfilled in the southern region of Taiwan.

All Quiet in the Taiwan Strait? Explaining the Recent Drop in PLA Aircraft Activity Around Taiwan

Authors: Noah Reed, Jonathan Walberg, Ethan Connell, & Joe O’Connor

From February 27th to March 5th, Taiwan’s Ministry of National Defense (MND) reported no People’s Liberation Army aircraft operating in the airspace near Taiwan’s Air Defense Identification Zone (ADIZ), an unusually long pause in activity that drew significant attention among regional observers. No supply flights, no repositioning of aircraft, and not even any training exercises. While long pauses in ADIZ violations have occurred in the past, it has become extremely rare in recent years for Taiwan’s military to detect no aircraft operating in the nearby airspace outside the ADIZ for a prolonged period. The reason for this is quite simple: ADIZ violations are almost always directed at Taiwan, while activity outside Taiwan’s ADIZ could involve routine training flights or transits between coastal airbases. Thus, it is more common for the PRC to halt incursions into Taiwan’s ADIZ than to reduce aviation activity in the Eastern Theater Command writ large over a long period of time.

This pause naturally sparked speculation, however many popular theories are as of yet unsupported by observable patterns and regional events. Observers have forwarded several possible explanations, to include the ongoing operations in Iran, the upcoming summit between President Trump and Xi, an inability to operate routinely following a series of major officer purges, and domestic politics in Taiwan. Below, we parse through the most prominent suggested theories and examine if they hold up to historical trends and further scrutiny. As our central argument suggests, it remains too early to make definitive judgments given the available data. Instead, we focus on understanding the factors behind several of the leading explanations for this break from pattern.

I: Domestic Explanations and Leadership Struggles

Two domestic events in the PRC could reasonably explain the dive in PLA activity in February. First, this week marked the beginning of the “Two Sessions,” an annual meeting of the PRC’s National People’s Congress (NPC).[i] Historically, this event coincided with lower ADIZ violations, with a notable exception of 2025.[ii] The heightened level of activity seen during 2025’s NPC meeting relative to prior years could be explained by the higher cross-Strait tension at the time, with the PLA holding its Strait Thunder-2025A joint exercise around Taiwan less than a month later.

Second, the end of the Spring Festival and the beginning of the Lantern Festival in the PRC could play some part in the lower activity. The Spring Festival has empirically propelled lower reported ADIZ numbers from late January into February over the last couple of years.[iii] Still, it is difficult to discern if the holidays alone drive these trends, or if it is merely one element of a broader rationale.

Finally, it is worth addressing the rumors that the PLA is simply incapable of conducting aerial activity around Taiwan due to recent turmoil in its leadership. This appears to be a less convincing explanation. After all, PLAN activity around Taiwan remains somewhat consistent, and the PLA and China Coast Guard (CCG) remain active in the Senkaku Islands and the South China Sea. Moreover, it is not clear why the removal of senior leadership would cause the PLA to be incapable of flying aircraft around Taiwan, as such activity has become routine, even mundane, for several years. It also cannot explain why several waves of aerial activity occurred around Taiwan in February after the leadership investigations took place.

Overall, the National People’s Congress, as well as Spring/Lantern festivals, have historically contributed to lower numbers of ADIZ and airspace violations. However, it is rare for these events to coincide with total stoppages in incursions.

II: Trump–Xi Meeting and the “Best Behavior” Hypothesis

Another explanation is that the pause reflects a temporary “best behavior” or truce period ahead of a pending meeting between Donald Trump and Xi Jinping later this spring.[iv] Under this interpretation, Beijing may be attempting to avoid incidents or tensions that could complicate or even cancel the meeting.[v] This suggests that China would reduce visible military pressure around Taiwan to create a more stable atmosphere prior to the meeting.

While plausible, the explanation doesn’t fit the observed pattern of activity.

First, the lull extended beyond just a halt in ADIZ incursions, but rather to all aircraft activity in the area, where regular flights and movements occur with training flights and movements between coastal bases. If the goal were to signal intent to Washington regarding Taiwan, Beijing could easily continue routine training flights in these areas while avoiding breaching Taiwan’s ADIZ. A complete halt of flights in the area goes beyond just signaling that Beijing doesn’t want to ‘rock the boat.’ It also assumes that Washington views the ADIZ as the principal outlet of PRC signaling over Taiwan, something that cannot necessarily be accepted at face value.

Second, the logic of a pre-summit truce, while plausible, would require a much longer pause in operations. This would become more plausible if the lull had continued. Further, it would commit the PLA to maintaining a break for a period following the summit, as a resumption of regular patrols would risk creating the impression that the summit had failed. In practice, maintaining the appearance of diplomatic restraint would likely require months of reduced activity, which is unlikely given the PLA’s ongoing pressure campaign that has seen few pauses since 2022.

Finally, the broader geopolitical context makes the argument less convincing. Some analysts frame ADIZ incursions as a signaling mechanism directed at Washington, meaning that temporarily halting them could itself be a signal, a tacit gesture of restraint ahead of a summit. But even under this logic, the timing is difficult to reconcile with current events. The United States is presently engaged in an escalating conflict with Iran involving large-scale strikes and the possibility of wider regional escalation.[vi] In that environment, it is not obvious why Beijing would view the suspension of routine PLA sorties near Taiwan as a necessary diplomatic signal. If Beijing is prepared to pursue high-level diplomacy with Washington while the United States is conducting major military operations elsewhere, it is difficult to see why the symbolic value of turning off routine Taiwan-related flights would suddenly become decisive.

Put simply, a snapshot of the rest of the world makes the idea that Beijing is shelving routine Taiwan-related air activity purely to preserve summit optics less convincing.

III: Signaling to Taiwan

Yet another explanation being advanced is that Beijing is signaling its lack of concern over Taiwan’s ongoing special defense budget debate. However, the timeline of PLA activity does not support this interpretation. The debate has been ongoing for months, yet PLA air activity remained elevated throughout that period.[vii] For example, Taiwan’s Ministry of National Defense reported 19 PLA aircraft operating around Taiwan on January 29, just days after the Taiwan People’s Party unveiled its alternative special budget proposal. Activity continued shortly afterward, with 32 PLA aircraft detected on February 12, two days after Lai publicly urged the Legislative Yuan to pass the proposal during a press conference. Similarly, 22 PLA aircraft were detected on February 26, the day after Taiwan’s legislature agreed to send multiple budget proposals to committee review. These patterns suggest that PLA air activity has continued regardless of developments in Taiwan’s defense budget debate.

The PRC is likely to react to developments in Taiwan’s special defense budget proposals as they move through the Legislative Yuan. Beijing has repeatedly framed major Taiwanese defense initiatives as provocations, often responding with diplomatic pressure or military signaling. The PLA’s most recent exercise, Justice-Mission 2025A, reflects this pattern.[viii] Much of the iconography and messaging released before and during the exercise framed the drills in punitive terms, portraying them as a warning to Taipei. In that sense, the exercise reinforced the perception that advances in Taiwan’s defense budgeting process can trigger demonstrative military responses from Beijing.

Others advance this as rewarding Lai for his statements during a Spring Festival event where he referred to “Mainland China” instead of just “China,” a term that the PRC prefers.[ix] This reference, while not necessarily insignificant in meaning, is unlikely to prompt Beijing to depart three years of policy and “reward” the Lai administration by giving them time to breathe over a difference in terminology.

IV: Middle East and Fuel Hypothesis, Regional activity

One external explanation for the Eastern Theater Command’s pause in flight activity is that Beijing is temporarily conserving aviation fuel amid uncertainty about the ongoing conflict in the Middle East and potential supply disruptions. Sustained air operations require significant fuel resources, and the PLA may reduce nonessential sorties if leadership anticipates a prolonged price increase or broader market volatility.

However, the fuel-constraint explanation presents two significant challenges:

First, China has invested decades in developing strategic petroleum stockpiles to mitigate supply shocks. Public estimates indicate that Beijing maintains hundreds of millions of barrels in state strategic reserves, supplemented by commercial storage.[x] Recent planning documents and reports further suggest that China continues to expand these undisclosed strategic holdings, rather than signaling scarcity.[xi] Therefore, if the PLA were experiencing immediate operational constraints due to fuel availability, it would indicate a far more acute, system-wide stress than current stockpiling trends imply.

Second, if fuel conservation were the primary factor, a broader reduction in activity would be expected across all PLA operating areas, rather than a distinct, localized pause in aircraft activity detected around Taiwan. Chinese military activity in other regions, however, appeared to remain consistent with typical patterns.

For example, in the South China Sea, the PLA’s Southern Theater Command publicly released footage of naval and air units conducting a readiness patrol around Scarborough Shoal on February 28.[xii] The patrol involved coordinated use of early warning aircraft, anti-submarine aircraft, fighters, and bombers, accompanied by messaging that forces remain “on high alert” and prepared to take countermeasures. A subsequent Weibo post by the Southern Theater Command highlighted a PLAAF unit undergoing “rigorous combat training,” with a follow-on Global Times report stating that these patrols and exercises have continued “since February” and are explicitly linked to responses to external “joint patrol” activity.[xiii] This reinforces that PRC operational signaling in the south has not paused during this period.

Japanese public reporting over the past week indicates continued and routine activity around the Senkaku Islands. In its March 1, 2026, update, Japan’s Ministry of Foreign Affairs notes that Chinese government vessels, mainly from the China Coast Guard, have continued to enter Japan’s contiguous zone near the Senkakus almost daily.[xiv] On February 28th, Japan’s Joint Staff reported that two People’s Liberation Army (PLA) Y-9 intelligence, surveillance, and reconnaissance (ISR) aircraft flew from the East China Sea, passed between Okinawa and Miyako, and continued into the Pacific as far as the Amami island chain, then reversed course and returned, prompting Japan Air Self-Defense Force (JASDF) scrambles.[xv] Overall, Japan’s official statements and recent Joint Staff reports indicate that PRC operations in the East China Sea remain active, even as aviation patterns near Taiwan fluctuate.

V. Preparing for an Invasion or Major Exercise

A more dramatic explanation is that the pause reflects preparations for a major PLA exercise. Others have posited that it could possibly be the ‘calm’ before an invasion or move on one of Taiwan’s outlying islands. Under this interpretation, the halt in routine aviation activity signifies an operational pause while forces reposition, conduct planning, or prepare for a larger coordinated operation.

It is true that large exercises or operations are sometimes preceded by short-term changes in routine activity, particularly if units are redeploying, conducting maintenance, or consolidating forces in preparation for a larger event.

However, there was little evidence during the pause to support the idea that it reflected imminent large-scale operations. Even a preparation for a theater-level exercise would likely generate additional changes and disruptions in observable patterns, including major changes in naval deployments, unusual airbase activity, logistical movements, and more. Many of these indicators are regularly detected through open-source monitoring and satellite imagery. At present, there are no clear signs of these types of preparatory activities occurring on a scale that would suggest a major operation is imminent.

More broadly, if the PLA were preparing a large exercise around Taiwan, it is not obvious why routine aviation activity across the Eastern Theater Command would need to halt. Training flights and patrols would normally continue alongside preparations unless airspace was being cleared for a specific operation, something that would likely be accompanied by other visible signals.

For these reasons, while the possibility of future exercises should never be discounted given the PLA’s recent pattern of demonstrations around Taiwan, the current pause alone is not strong evidence that a major operation is imminent.

Taken together, the available evidence suggests that the brief pause in PLA aviation activity around Taiwan was unlikely to be driven by any single factor. Domestic political events in China, including the NPC “Two Sessions” and the seasonal slowdown associated with the Spring Festival period, likely contributed to a temporary reduction in operational tempo. At the same time, explanations centered on diplomatic signaling, energy constraints, or preparations for major military operations remain less consistent with observed patterns of activity both around Taiwan and in other regions.

The resumption of PLA flights shortly after this lull reinforces a broader pattern that has characterized Chinese military pressure around Taiwan in recent years: cyclical activity. Periods of heightened sorties are often followed by short pauses before returning to baseline levels. Rather than indicating a change in Beijing’s strategy, the episode likely reflects the routine variability inherent in sustained military operations.

The more important analytical question is not why the PLA paused for several days, but how Beijing calibrates these cycles of pressure. Short interruptions in activity can create the perception of sudden shifts in intent, even when the underlying strategy remains unchanged.

[i] https://asiasociety.org/policy-institute/what-watch-chinas-two-sessions-2026

[ii] PLA Tracker: https://docs.google.com/spreadsheets/d/1qbfYF0VgDBJoFZN5elpZwNTiKZ4nvCUcs5a7oYwm52g/edit?gid=905433190#gid=905433190

[iii] https://chinadrew.substack.com/p/the-pla-has-stopped-flying-aircraft?triedRedirect=true&_src_ref=t.co

[iv] https://www.reuters.com/business/aerospace-defense/chinese-military-flights-around-taiwan-fall-trump-xi-meeting-may-be-factor-2026-03-05/

[v] https://www.taipeitimes.com/News/taiwan/archives/2026/03/05/2003853320

[vi] https://www.war.gov/Spotlights/Operation-Epic-Fury/

[vii] PLA Tracker: https://docs.google.com/spreadsheets/d/1qbfYF0VgDBJoFZN5elpZwNTiKZ4nvCUcs5a7oYwm52g/edit?gid=905433190#gid=905433190

[viii] https://tsm.schar.gmu.edu/justice-mission-2025-the-narrative-battle-inside-chinas-latest-taiwan-exercise/

[ix] https://chinadrew.substack.com/p/the-pla-has-stopped-flying-aircraft?triedRedirect=true&_src_ref=t.co

[x] https://www.eia.gov/international/analysis/country/chn

[xi] https://www.reuters.com/business/energy/china-targets-steady-oil-output-more-gas-stockpiling-five-year-plan-2026-03-05

[xii] https://www.globaltimes.cn/page/202603/1355963.shtml

[xiii] https://weibo.com/7468777622?tabtype=album&uid=7468777622&index=0; https://www.globaltimes.cn/page/202603/1356043.shtml; https://www.globaltimes.cn/page/202603/1355963.shtml

[xiv] https://www.mofa.go.jp/files/100857530.pdf; https://www.mofa.go.jp/region/page23e_000021.html

[xv] https://www.mod.go.jp/js/pdf/2026/p20260302_01.pdf

Weekly Arms Update: 3/4/26

Authors: Joe O’Connor, Shikhar Chaturvedi, Danielle Kremer, and Wyeth Lindberg

This week: MND officials provide an update on the delivery of the last batch of Abrams tanks, Taiwan reportedly receives $70 million in royalty payments from F-16V development, both KMT and TPP officials speak about special defense budget proposals, and the military warns of delays to PAC-3 missile production owing to conflict in the Middle East, alongside weekly awards and solicitations.

Abrams Tank Delivery Updates

Taiwan’s M1A2T Abrams program is approaching delivery completion, with reporting confirming that 80 of 108 tanks have already arrived, including 38 delivered in December 2024 and 42 delivered in July 2025, while the final tranche of 28 is projected to be shipped in March, with arrival in April (a timeline that Taiwan Security Monitor’s July 2025 Arms Sale Backlog Update previously assessed as on schedule). Operationally, the Army has paired deliveries with a visible training and validation rhythm. Reporting notes the first tranche completed conversion training and live-fire events before transitioning toward fielded status, and the broader deployment plan aligns the tanks with Sixth Corps’ northern defense posture, centered on the 584th Brigade with a smaller allocation to the 269th Brigade, reflecting an infrastructure protection logic tied to approaches to key nodes such as Taipei Port. From a procurement perspective, the Abrams case is a useful execution benchmark inside the broader U.S.–Taiwan pipeline. Taiwan Security Monitor’s backlog tracking has flagged Abrams as one of the smoother Foreign Military Sales deliveries, and notes that completion of the final tranche would shift topline backlog optics even as higher friction programs remain constrained by contracting timelines and industrial capacity.

Taiwan Receives Royalty Payments for F-16V Jets

MND officials revealed on Saturday that as of the end of 2025, Taiwan had received approximately US$70 million (NT$2.197 billion) in royalty payments from buyers of F-16V Fighting Falcon fighter jets. A new configuration of the F-16 with advanced AESA radars, avionics, and Auto Ground Collision Avoidance System (Auto GCAS), the Taiwanese government originally worked with the United States and Egypt, who both withdrew, leaving Taiwan as the sole developer and eligible to receive rebate payments from other countries who procure F-16Vs. Per officials, Taiwan is expected to earn hundreds of millions of dollars more from rebate payments in the next five years, as global purchases of the aircraft increase.

Legislative Yuan + Special Defense Budget Updates

On Tuesday, Kuomintang (KMT) legislator Lo Ting-wei confirmed in a radio interview that at a recent dinner attended by KMT lawmakers ahead of Taichung Mayor Lu Shiow-yen’s trip to the US this week, it was mentioned that the United States had apparently demanded the KMT’s special defense budget be approximately NT$900 billion (US$28.6 billion). As we reported last week, the proposed amount of the KMT’s special budget has been highly variable, with Lo confirming this week that it could be between NT$350 billion (US$11.19 billion) and NT$810 billion (US$25.63 billion), not including the US’s suggestion of NT$900 billion. Per other sources, the KMT’s proposal is being personally managed by caucus whip Fu Kun-chi and is still set to be released by the end of this week.

Also on Tuesday, Taiwan People’s Party chairman Huang Kuo-chang held an exclusive interview with The Japan Times, stating that the TPP would agree to pass the Lai administration’s NT$1.25 trillion (US$40 billion) special budget proposal if the U.S. State Department notified a new, second package of arms sales that would be included under that budget. Huang stated that “we see no reason to write a blank check” for the government’s budget until more information on specific capability-based spending is released. Per our recent analysis of the Lai administration and TPP budget proposals, the TPP’s focus is specifically on funding sales that have already been approved, including HIMARS, Paladins, and anti-armor missiles. Prior reporting by the Financial Times and New York Times, however, indicate that the Trump administration is delaying approval of a new package of sales until after Xi and Trump meet in April.

On Monday, February 23, an unclassified Department of Defense spending plan was delivered to the U.S. Congress. This spending plan included allocating NT$26.9 billion (US$850 million) as part of a reconciliation bill passed last year. According to the Taipei Times, these funds will be used to replenish US weapons stockpiles, some of which were given to Taiwan. Additionally, this allocation serves to strengthen the alliance between Taiwan and the United States of America in accordance with the Taiwan Enhanced Resilience Act (TERA), passed in 2022. This spending is in addition to approximately US$150 million allocated in the FY26 Department of Defense Appropriations Act, passed in January, backfilling $850 million that was cut by appropriators.

Military Sources Warn of PAC-3 Delays

Military officials stated to Liberty Times today that plans to purchase a battalion worth of Patriot launchers and air defense missiles may be delayed owing to “production crowding,” as well as conflicts in Ukraine and the Middle East. Since Taiwan’s Patriot purchase is still in the planning phase, per the officials, it is possible that the United States prioritizes production of missiles to be used in the Middle East or to replenish its own stockpiles before fulfilling Taiwan’s case. To this end, LTN reported that the military would continue monitoring via military exchange channels and also urged that a special budget be passed to avoid disruptions.

Weekly Awards/Solicitations

On Thursday, several bid solicitations were made:

The Air Force Command solicited bids for oxygen concentrators and ancillary equipment, worth NT$432.00 million (US$13.61 million).
The Information and Communications Command solicited bids for cross-domain solution software and hardware, worth NT$801.49 million (US$25.19 million).
The Information and Communications Command also solicited bids for fiber-optic splicing equipment, worth NT$283.75 million (US$8.91 million).

Also on Thursday, the Air Force Command awarded a NT$1.08 billion (US$34.23 million) contract to Air Asia Co. Ltd for the civilian outsourcing of repair and supply services at the Air Force’s Songshan Air Base. Air Asia Co. Ltd, an aircraft maintenance company now owned by Taiwan’s Aerospace Industrial Development Corporation (AIDC), was previously owned and operated covertly by the Central Intelligence Agency. The contract is to be fulfilled at the Songshan Air Base, in the Songshan district of Taipei.

On Monday, the Military Medical Bureau awarded Ningliren Medical Equipment Co., Ltd., a NT$52.75 million (US$1.66 million) contract for interventional angiography X-ray machines. The contract is to be fulfilled in the northern region of Taiwan.

On Wednesday, the Information and Communications Command solicited bids for the integrated construction of field information equipment, translation and voice systems, worth NT$558.18 million (US$17.65 million).

Weekly Arms Update: 2/25/26

Author: Joe O’Connor, Shikhar Chaturvedi, Danielle Kremer, & Wyeth Lindberg

This week: Military sources reveal plans to purchase nine more NASAMS fire units, the Navy releases their unmanned surface vessel acquisition plan, the Strong Bow missile system passes operational test and evaluation, and the Legislative Yuan reconvenes to debate special defense budgets, alongside weekly awards and solicitations.

MND Reveals Nine NASAMS Fire Units to be Bought

As part of President Lai’s Taiwan Shield project, the Taiwanese military announced the possible purchase of nine additional National Advanced Surface-to-Air Missile System (NASAMS) fire units, funded by a budget of NT$1.25 trillion (US$39.8 billion). With this purchase, and a previous purchase in 2024, Taiwan will have procured 12 fire units, roughly four batteries’ worth. This missile system will allow Taiwan to defend against aircraft, cruise missiles, and other aerial threats.

Navy Releases USV Acquisition Plan

The Navy’s unmanned surface vessel (USV) program convened an industry briefing meeting before the Lunar New Year, per Liberty Times, to discuss procurement timelines. Navy officials stated on Monday that the acquisition of approximately 1,000 USVs will begin in three phases, with iterative batch tenders of various types being solicited in 2028. Further phases between 2029 and 2033 would enhance 3D recognition and build upon AI technologies to enhance “swarm-control” capabilities. However, the Navy also pointed out that progress on this would increase if the National Chung-Shan Institute of Science and Technology (NCSIST), Taiwan’s state-owned weapons development center, were entrusted with program execution.

Strong Bow System Passes Operational Tests

Taiwan’s domestically developed “Strong Bow” (強弓) air and missile defense system appears to have crossed a critical readiness threshold, with recent reporting indicating that the program has completed operational evaluation and is prepared to transition into mass production pending Legislative Yuan approval of the Lai administration’s NT$1.25 trillion special defense budget, tied to the broader “Taiwan Shield / T Dome” framework. Strong Bow is intended to expand Taiwan’s engagement envelope upward, pairing a new Active Electronically Scanned Array (AESA) radar claimed to exceed 500 km in surveillance range, with an interceptor layer in the 70 km band, while integrating decision support tools designed to manage saturation conditions alongside existing Sky Bow and Patriot systems. Minister of National Defense Wellington Koo has consistently framed “Taiwan Shield” as a “sensor-to-shooter integration” challenge, stressing that AI-assisted fusion and fire control coordination are essential to raising interception probability rather than simply increasing interceptor counts.

From a procurement perspective, our weekly arms update from early February highlights an MND policy document outlining plans for two launchers and 128 missiles, while the regulated products list also reflects adjacent support equipment tied to the mid-layer anti-tactical ballistic missile architecture. Taken together, Strong Bow’s operational test milestone should be viewed as an important potential inflection point in the “T-Dome” acquisition pipeline.

Legislative Yuan + Special Defense Budget Updates

On Tuesday, the Legislative Yuan (LY) returned from a short Lunar New Year recess. After stating last week that the two rival special defense budget proposals would be among the “very first” to be considered, the chamber voted to advance the Lai administration’s NT$1.25 trillion (US$40 billion) special budget proposal to a joint review by the LY’s Finance Committee and the Foreign Affairs and National Defense Committee. This leaves both proposals in the committee review stage, after the TPP’s proposal was advanced on 30 January, prior to the recess.

MND officials, including Minister Wellington Koo, continue to express concern over the timing of budget proposals, pointing to Letters of Offer and Acceptance (LOAs) for three U.S. arms sales approved in December that expire if not signed by March 15. The sales, which include TOW and Javelin anti-armor missiles, as well as Paladin self-propelled howitzers, totaling approximately NT$149.0 billion (US$4.76 billion), would be subject to renegotiation or cancellation if the LOAs are not signed. Koo, expressing worry about this possibility, said that he hoped the LY would pass the administration’s proposal to avert this from happening.

On the sidelines of the LY: the Kuomintang (KMT) announced that they would be releasing their own special budget proposal soon, with plans to submit for review by 6 March. Per KMT sources, the proposal could range from a cap of NT$350 billion (US$11.19 billion) to NT$750 billion (US$23.97 billion) and would likely include significant pay raises for military personnel.

Weekly Awards/Solicitations

On Monday, the Production and Manufacturing Center, Armaments Bureau, made a repeat solicitation of bids for FED #215 primers for rifle cartridges, worth NT$38.00 million (US$1.21 million).

On Tuesday, the Ministry of National Defense solicited bids for procurement of frozen meat products, worth NT$1.96 billion (US$62.60 million).

On Wednesday, the Information, Communications, and Electronic Force Command solicited bids for the licensing of cloud information services, worth NT$36.03 billion (US$1.15 billion).

U.S. Contracts Relating to Taiwan

On Friday, the U.S. Air Force awarded BAE Systems Information and Electronic Systems Integration a US$98.87 million indefinite-delivery/indefinite-quantity (IDIQ) contract for F-16 commodities sustainment, likely covering spare and other consumable parts. The contract supports Foreign Military Sales (FMS) for Taiwan’s 66 F-16C/D Block 70 aircraft, along with at least 20 other countries. No Taiwan FMS funds were obligated at the time of award. Contract work is expected to continue through February 2037.

On Wednesday, the U.S. Army awarded a contract modification worth US$18.99 million to Iron Mountain Solutions, Inc., for technical support to the Utility Helicopters Project Office. This extension uses Taiwan FMS funds alongside 20 other countries. Work is expected to be completed by September 2026 and is an extension of a contract originally awarded in February 2021.

Taiwan’s NT$1.25 Trillion Question: Comparing the DPP and TPP Defense Budget Plans

Authors: Sydney Boerner & Joe O’Connor

Introduction

On November 19, 2025, Taiwanese President Lai Ching-te officially announced his administration’s proposal for a NT$1.25 trillion (US$40 billion) special defense budget through a press conference and an editorial in the Washington Post. The proposal, formally titled the Draft Special Act on Procurement for Enhancing Defense Resilience and Asymmetric Capabilities, or the National Defense Resilience Act, is supported by the Ministry of National Defense (MND) and emphasizes “Resilience” (韌性), framing security as the whole of society’s ability and capacity to withstand and recover from external pressures.

On January 26, 2026, the Taiwan People’s Party (TPP), an opposition party allied with the Kuomintang (KMT), introduced an alternative proposal titled the Draft Special Act for Procurement of Plans to Safeguard National Security and Strengthen Asymmetric Warfare Capabilities. The proposal emphasizes “Safeguard” (保衛), highlighting the state’s responsibility to protect territorial integrity through established hardware rather than a whole-of-society framework. It sets a ceiling of NT$400 billion (US$12.69 billion), approximately one-third of the Lai administration’s proposal, but still larger than the Tsai administration’s 10% year-over-year increase in 2021 of NT$42.1 billion (US$1.51 billion). Prior to this proposal, the KMT/TPP majority in the LY successfully blocked placing the DPP proposal on the agenda multiple times, effectively rendering it dead on arrival until this alternative was announced.

Both proposals remain actively under review in the Legislative Yuan (LY), and most importantly, are multi-year funding packages in addition to yearly “base” defense budgets. Their current status allows for comparisons between the proposals with respect to funding levels and oversight mechanisms. As of the time of writing, the KMT has also stated that they will be releasing a third budget proposal of their own, but information about it has not been released so far.

General Budget Comparison

The two proposals reflect different governance approaches and political priorities. The DPP emphasizes long-term flexibility, broader strategic objectives, and standard oversight, while the TPP emphasizes legislative control, fiscal transparency, and strict procedural accountability.

As stated above, the primary difference between the proposals is the topline ceiling of appropriations, with the TPP proposal setting a ceiling of NT$400 billion, roughly 32 percent of the DPP’s proposed NT$1.25 trillion. Both proposals share the same eight-year timeline from 2026 to 2033. The DPP proposal authorizes an eight-year lump sum with inter-category transfers and rollover of unspent funds, allowing year-over-year budgetary flexibility. In contrast, the TPP proposal requires an annual release vote on funds, prohibits inter-category transfers, and mandates that any unspent funds be returned to the National Treasury rather than rolled over, framing these requirements as measures of fiscal transparency and legislative accountability.

Oversight, reporting, and procurement procedures also differ between the proposals. The DPP proposal relies on standard oversight via the LY Foreign Affairs and National Defense Committee, records unit prices in a classified annex, and handles price increases through internal review under U.S. Foreign Military Sales (FMS) procedures. The proposal is exempt from the Public Debt Act, which enforces a 50% debt-to-GDP spending cap for all budgets. Additionally, it follows constitutional reporting standards, wherein the President is not required to report directly or answer questions to the LY – an issue that has recently sparked a minor constitutional crisis. Procurement may include emergency purchases from domestic suppliers or friendly third nations, and the proposal establishes links to NATO spending targets of 3.3 percent of GDP in 2026 and 5 percent by 2030 within standard procurement cycles.

In contrast, the TPP proposal grants line-item veto authority to the LY Foreign Affairs and National Defense Committee, requires public disclosure of unit prices, and mandates a re-vote if any item price increases by more than 5 percent. The proposal mandates the President deliver a “National Defense Report” before the LY and respond to questions, in line with the recently amended Law on the Exercise of Offices and Powers of the Legislative Yuan; the constitutionality of this action is disputed and in 2024, the Constitutional Court heard arguments on the issue. The proposal is subject to the Public Debt Act’s spending ceilings; procurement is restricted to U.S. FMS sales (with a 30-day congressional notification period); and spending focuses exclusively on hardware, in accordance with existing U.S. notifications.

Hardware and Weapons Systems Procurement

Both proposals maintain key artillery and missile capabilities, but they differ in priorities, scope, supporting systems, and integration across operational domains. The DPP proposal develops a broad, multi-domain capability that reflects the MND’s seven major objectives. In contrast, the TPP proposal prioritizes a narrower set of newly announced procurement programs within strict budget caps, with reduced integration and supporting systems, reflecting a focus on immediate operational needs and legislative oversight.

Building on the differences in governance and political priorities, the proposals also differ in their approach to hardware procurement. The DPP proposal is designed to strengthen seven major defense objectives through special provisions, including:

“A multi-layered air interception network”
“Command and control and decision support”
“Multi-layered weakening”
“Long-range precision strike”
“Strengthening combat resilience”
“Enhancing military capacity”
“Defense driving economic benefits”

Procurement items include:

“Precision artillery”
“Long-range precision strike missiles”
“Unmanned vehicles and their countermeasures systems”
“Air defense, anti-ballistic missile and anti-armor missiles”
“AI-assisted and C5ISR systems”
“Enhancing sustained combat capacity equipment”
“Equipment and systems jointly developed and procured by Taiwan and the United States”

In terms of precision artillery, the DPP procurement plan includes 60 M109A7 Paladin self-propelled howitzers with 4,080 precision-guided munitions, 60 M992A3 ammunition vehicles, and 12 M88A2 Hercules recovery vehicles. Long-range precision strike missile capabilities include 82 M142 High Mobility Artillery Rocket System (HIMARS) multiple-launch rocket launcher systems, 1,203 Guided Multiple Launch Rocket System (GMLRS) pods, and 420 Army Tactical Missile System (ATACMS) missiles. Unmanned vehicles and countermeasures include 1,554 ALTIUS-700M loitering munitions and 478 ALTIUS-600ISR surveillance drones, in addition to more than 200,000 drones of various types and 1,000 unmanned surface vessels. Air defense, anti-ballistic, and anti-armor capabilities include 1,050 FGM-148 Javelin anti-armor missiles and 70 launchers, as well as 1,545 BGM-71F TOW-2B anti-armor missiles and 24 launchers. AI-assisted and C5ISR systems include artificial intelligence decision-support systems, tactical communication networks, and rapid intelligence-sharing kits. To strengthen operational sustainability, the DPP procurement plan establishes strategic stockpiles of ammunition, including 105mm and 120mm tank rounds, 30mm autocannon rounds, and 155mm artillery and grenade munitions. The proposal also calls for establishing domestic production lines for other combat equipment, including chemical protective masks, night-vision devices, armored vehicles, and mobile barrier equipment. Finally, the DPP’s proposal includes the procurement of systems jointly developed with the United States to acquire emerging technologies, enhance operational resilience, and strengthen asymmetric warfare capabilities.

In contrast, the TPP proposal adopts a narrower procurement framework centered on a defined set of high-priority, primarily ground-based, strike and anti-armor systems subject to explicit fiscal ceilings. Rather than pursuing a comprehensive, multi-domain modernization effort, the proposal emphasizes targeted investments in immediately deliverable capabilities, strict budget caps, and phased legislative oversight under the total NT$400 billion ceiling. It omits broader initiatives related to integrated air and missile defense expansion, large-scale unmanned fleets, AI-assisted C5ISR architecture, strategic stockpiling, domestic industrial expansion, and wide-ranging joint development programs, reflecting a more limited scope focused on core denial capabilities.

Regarding procurement items, the TPP plan maintains the MND’s plans for 60 M109A7 Paladin self-propelled howitzers, including the accompanying 4,080 PGMs, 60 ammunition vehicles, and 12 recovery vehicles, but caps the total at NT$126.7 billion. It also keeps plans for 82 M142 HIMARS systems with 1,203 GMLRS pods and 420 ATACMS, also capped at NT$127.6 billion. Lastly, the TPP plan keeps the proposed procurement of 1,050 Javelin and 1,545 TOW-2B anti-tank missiles, totaling NT$11.8 billion and NT$11.1 billion, respectively. This is alongside a separate anti-armor unmanned aerial missile program, which is assumed to be ALTIUS systems, capped at NT$34.7 billion. An additional NT$88.1 billion is reserved for other urgently needed items deliverable within three to five years, provided they are individually specified and do not duplicate annual defense programs.

	DPP/MND Proposal	TPP Proposal
“Precision artillery”	60 M109A7 Paladin self-propelled howitzers w/ 4,080 precision-guided munitions	Included, capped at NT$126.7 billion
	60 M992A3 ammunition vehicles
	12 M88A2 Hercules recovery vehicles
“Long-range precision strike missiles”	82 M142 HIMARS multiple-launch rocket launcher systems	Included, capped at NT$127.6 billion
	1,203 Guided Multiple Launch Rocket System pods
	420 ATACMS missiles
“Unmanned vehicles and their countermeasures systems”	1,554 ALTIUS-700M loitering munitions	Only ALTIUS systems included, capped at NT$34.7 billion
	478 ALTIUS-600ISR surveillance drones
	200,000+ drones
	1,000+ unmanned surface vessels
“Air defense, anti-ballistic missile and anti-armor missiles”	1,050 FGM-148 Javelin anti-armor missiles w/ 70 launchers	Included, capped at NT$11.8 billion
	1,545 BGM-71F TOW-2B anti-armor missiles w/ 24 launchers	Included, capped at NT$11.1 billion
“AI-assisted and C5ISR systems”	AI decision-support systems	None
	Tactical communications networks
	Rapid intelligence-sharing kits
“Enhancing sustained combat capacity equipment”	Domestic production lines and stockpiles for 105mm & 120mm tank rounds, 30mm autocannon rounds, 155mm artillery & grenade munitions	None
	Domestic production lines for chemical protective masks, night-vision goggles, and armored vehicles, and mobile barrier equipment
“Equipment and systems jointly developed and procured by Taiwan and the United States”	Included, unknown quantity	None

Infrastructure and Technology

In addition to hardware and weapons systems procurement, the DPP proposal emphasizes investments in infrastructure and integrated technology. Funding is included for “tactical mission networks,” which link units across dispersed battlefields, enable real-time data sharing, and integrate AI decision-support systems to assist operational commanders. The proposal also strengthens digital resilience by establishing redundant, protected communication networks to ensure command and control functions remain operational under contested or degraded conditions. Strategic communications capabilities are expanded across terrestrial, aerial, and satellite networks to maintain secure and continuous information flow. Early warning systems incorporate unmanned vehicles and sensor platforms to detect potential threats and transmit real-time intelligence. Hardened basing initiatives improve the protection of key command facilities, including shielding against missile strikes and electromagnetic pulse effects. These elements support the DPP’s operational objectives of command, control, and decision support and, in particular, enhancing operational resilience across the defense system.

On the other hand, the TPP proposal adopts a narrower approach focused on immediately deliverable capabilities and does not fund any of the above programs. The TPP proposal emphasizes platform-centric and hardware-focused defense measures rather than multi-domain technological integration. While it provides rapid acquisition of ground-based strike and anti-armor systems, it does not include the networked architecture, sensor integration or protected command infrastructure envisioned in the DPP proposal.

Personnel and Sustainment

Beyond infrastructure and technology, the two proposals also differ in their approach to personnel and sustainment, focusing on the support required to operate and maintain procured systems. The DPP proposal includes training tied to the operation of artillery, missile, and unmanned systems, but does not fund separate training units or simulation centers. Life-cycle support is provided within procurement categories and may cover pre-paid technical support, repair kits, and system-specific overhauls. Spare parts are included only as required for the acquired equipment, without establishing centralized pools for aircraft, armored vehicles, or naval engine turbines. Repair depots and maintenance infrastructure are referenced in connection with equipment sustainment, with no dedicated funding for depots, hardened workshops, or automated repair facilities. Strategic ammunition is purchased alongside the weapons systems, rather than as a separately authorized stockpile. Industrial base support is limited to domestic production and development associated with specific procured systems, with no independent funding for broader defense industrial expansion or research and development.

In contrast, the TPP proposal provides only the minimal sustainment necessary to operate the procured systems. Training, life-cycle support, spare parts, repair depots, strategic ammunitions, and industrial base development are largely omitted or limited to what is immediately required for the specific equipment acquisitions, included as part of FMS cases. Broader sustainment measures, including depot construction, centralized parts pools, or strategic stockpiles, remain the responsibility of the regular annual defense budget. Industrial base engagement is confined to the basic procurement compliance and cooperative requirements, without separate funding for domestic production capacity. In practice, the TPP proposal prioritizes rapid acquisition and legislative oversight over embedded operational support. In contrast, the DPP proposal incorporates limited sustainment elements to ensure ongoing operational readiness of the procured systems.

Conclusion

The major differences between the two special defense budgets center around flexibility and holistic spending, as opposed to narrower and targeted procurements of established systems. The inclusion of funding for newly announced HIMARS and Javelin sales from December in the TPP proposal indicates at least some level of good-faith bargaining for weapons, apart from Paladins, that are asymmetric in nature. Increased oversight provisions are beneficial for open-source monitoring, such as our work, but conflict with the Lai administration’s preferences, and constitutional issues surrounding Lai himself reporting to the LY. It is clear that those provisions, more than anything else, will be one of the biggest budget battles in the near future.

As of the time of writing, the LY is set to reconvene on February 24, with Speaker Han Kuo-yu indicating that the competing special defense budget proposals will be the “very first” items to be considered by the legislature. It is assumed that other proposals will emerge, or the two proposals will change, and we await the outcome of the LY’s deliberations.

Weekly Arms Update: 2/18/26

Author: Joe O’Connor, Shikhar Chaturvedi, Danielle Kremer, and Wyeth Lindberg

This week: the Army pushes back on reports that testing of new ALTIUS drones was not effective; a bipartisan US letter is sent to Taiwanese legislators worried about defense spending; reports show that a potential US arms sale could include radars and counter-drone systems alongside PAC-3 missiles, and Trump announces that he will make a decision “pretty soon” on additional sales to Taiwan,

Army Pushes Back on ALTIUS Test Failures

In August 2025, Taiwan received its first batch of “Hunter Owl” ALTIUS-600M UAV attack drones from the United States. As such, Taiwan began using its Army Artillery Testing Center to conduct the drones’ first live-fire exercises. However, reporters claimed the results were less than ideal, this week, with only two out of five drones successfully completing the tests. In response to media reports, Taiwan’s army stated that the drones were performing normally and emphasized that they planned to incorporate the new weapons and equipment into these exercises soon. In December, an additional sale of 1,554 ALTIUS-700M loitering munitions and 478 ALTIUS-600 ISR drones was announced, indicating that more will be arriving soon.

US Legislators Send Letter to LY; Speaker Responds

On Thursday, 37 US senators and representatives, including senior members of the House and Senate Foreign Affairs Committees and representing both parties in Congress, sent a letter to the speaker of the Legislative Yuan (LY) and party leaders, expressing concern about “ongoing deliberations in the Legislative Yuan to only partially fund a supplemental budget request.” After noting that “the US must address the massive backlog in weapons deliveries,” the letter noted that “we need Taiwan to step up with us,” urging the LY to pass the special defense budget advanced by the Lai administration. On Monday, LY Speaker Han Kuo-yu responded in a joint statement, saying that they will prioritize the review of the special defense budget when the LY reconvenes on February 24.

Potential US Arms Sale to Include Radars, M-ACE

MND sources told the Taipei Times on Friday that the next potential arms sale to Taiwan could include much more than PAC-3 MSE interceptor missiles, including improved radars and counter-drone equipment. Per sources, the sale could include Integrated Battle Command Systems, which coordinate Patriot and other AD systems, as well as Lower Tier Air and Missile Defense Sensors (LTAMDS) radars, which would replace currently installed radars on Patriots. Additionally, a separate sale may include Mobile-Acquisition, Cueing and Effector (M-ACE) counter-drone systems, which consist of sensors, jammers, and autocannons mounted on pickup trucks and produced by Northrop Grumman.

Trump to Decide “Soon” on Arms Sales to Taiwan

On Monday, President Donald Trump said he is “talking” with Xi Jinping about potential additional U.S. arms sales to Taiwan and that a decision will be made “pretty soon,” prompting a rapid White House clarification that there has been no change in U.S. policy. Beijing, for its part, has elevated arms sales as the “most important” issue in U.S.–China relations ahead of a possible April summit, urging Washington to act prudently. The U.S.–Taiwan arms-sale backlog remains roughly US$32 billion, with no new cases notified since December. Meanwhile, Taiwan’s stalled special defense budget continues to shape how quickly notified systems can move into execution. At a February 11 Presidential Office press conference, President Lai warned that U.S. and other major suppliers’ production lines are already “排滿” (fully booked) and cautioned that delays in passing the special defense budget could push Taiwan out of priority queues, further slowing delivery of key systems. Taken together, Trump’s pending decision should be viewed less as a standalone political headline and more as a potential inflection point in the backlog queue. While current White House communications may signal commitment, deterrent value will ultimately hinge on whether weapons are actually contracted, funded, and delivered on time.

Weekly Awards/Solicitations

There were no significant awards or bid solicitations this week.

Taiwan Arms Sale Backlog, January 2026 Update

Special Budget Complications Continue

By Joseph O’Connor and Eric Gomez

The first month of 2026 was relatively slow for the US arms sale backlog to Taiwan. No new Foreign Military Sales (FMS) were notified to Congress or fully delivered; the topline value of the backlog saw no change since December. Deadlock on the special defense budget in the Legislative Yuan (LY) continued, with the opposition Taiwan People’s Party (TPP) submitting its own, reduced proposal. Additionally, the Department of Defense awarded a contract for the production of F-16 simulators being purchased by Taiwan.

The arms sale backlog as of January 31, 2026, remains $32.0 billion. For arms sales valued at over $1 billion, deliveries in progress are marked in yellow-orange in our visualizations, meaning that the true dollar value is lower than the topline. Figure 1 illustrates the breakdown of the backlog between asymmetric weapons, traditional weapons, and munitions. Table 1 provides an itemized list of all arms sales in the backlog, including the most up-to-date information on their status.

Special Defense Budget Complications

The MND’s special defense budget, initially announced by President Lai in November 2025, continued its tumultuous journey through the LY in January. The administration’s proposal, a budget of NT$1.25 trillion (US$40 billion) to be spent over eight years, remained in the LY’s Foreign Affairs and National Defense Committee. Legislators in the Kuomintang (KMT) and Taiwan People’s Party (TPP) — which hold a combined 62 seats to the Democratic Progressive Party’s (DPP) 51—have prevented Lai’s budget from advancing to the full LY. On January 19, Minister of National Defense Wellington Koo delivered a closed-door, confidential briefing to the Foreign Affairs and National Defense Committee, but little concrete information about the budget was released.

Meanwhile, the TPP announced a counter proposal for the special defense budget, worth NT$400 billion (US$12.69 billion) on January 26 in a press conference, sending it to the LY Foreign Affairs and National Defense Committee for review on January 30. This reduced budget proposal contains funding for five of the eight cases announced in December, including Paladin self-propelled howitzers, HIMARS launchers and munitions, Javelin and TOW anti-tank missiles, and ALTIUS loitering munitions, for a total of NT$311.9 billion (US$9.90 billion). The December FMS cases not funded in the TPP’s proposed budget are tactical mission networks, and spare parts for attack helicopters and Harpoon anti-ship missiles. The proposal also omitted funding for local partnerships with the Taiwanese defense industrial base, including the procurement of some 200,000 drones. The NT$400 billion represents a spending ceiling, with the LY needing to vote on new funding each year until the total amount is reached. This gives the LY much more oversight power over arms sale spending, giving them multiple opportunities to pause or redirect funding if cases fall behind schedule.

Interestingly, the inclusion of the five most significant cases from December indicates an implicit desire to continue procurement of mostly asymmetric systems. The TPP proposal also includes oversight provisions, including “comprehensive special reports” on case statuses over the last five years, how said procurement cases improve joint operational effectiveness, acquisition timelines, and delivery dates, and fiscal impacts. An MND press conference on 26 January refuted these oversight provisions as being time-prohibitive and having effects on the progress of backlogged cases. If passed, however, this level of oversight would provide more effective monitoring of the backlog.

MND Hints at Further Sales

After a Cabinet meeting on 15 January, Vice Minister of National Defense Hsu Szu-chien stated that four more arms sales from the US were in the pipeline, but had yet to be notified to Congress, without giving more details. As of the end of January, it is thought that additional Patriot air defense missile batteries and PAC-3 MSE missiles are one of those sales, but no details have been confirmed by the MND. This, of course, presents more opportunities for the backlog to only grow, but only after these sales have been notified to the U.S. Congress.

F-16 Simulator Contract Awarded

On 29 January, the U.S. Air Force awarded a contract definitization modification valued at US$69.88 million (using US$59.42 million of Taiwan FMS funds) for the procurement of F-16 Block 70 training simulators for the ROC Air Force. This is an extension of a contract originally awarded in January 2023 and appears to be the sixth such extension. Work under the contract is expected to be completed by August 2028, pending further contract extensions. This contract award is part of the US$8 billion F-16 Block 70 sale approved in August 2019.

Other Updates

A few other updates on backlogged cases emerged this month. First, after the 19 January confidential hearing, Minister Koo revealed that from the December sale, 1,554 ALTIUS-700M loitering munitions and 478 ALTIUS-600ISR drones would be procured. This case is worth US$1.1 billion, and previously, the quantity of drones was not specified. Owing to the speed of the first sale of ALTIUS being delivered to Taiwan, we expect this December case to also be fulfilled quickly.

During the month, the MND released details about production line enhancement projects set to be funded under their special defense budget proposal. Among other projects, the 202nd Factory of the MND’s Armaments Bureau is set to increase 155mm artillery shell production. This affects the recent December sale of Paladin self-propelled howitzers, as those are the only systems in Taiwan’s inventory that would use that caliber of shell. MND sources also stated that surplus 155mm shells would be sold via a partnership with the United States.

On 21 January, the U.S. Army awarded a contract extension worth US$202.78 million (using US$52.38 million in Taiwan FMS funds) to Lockheed Martin for inspection, recertification, and repair of PAC-3 missiles, presumably including missiles in Taiwan’s possession or to be delivered to Taiwan. Similar to the above F-16 contract, this is an extension of a contract originally awarded in June 2022, and work is expected to be completed by June 2028.

Conclusion

January marked the continuation of ongoing budgetary battles in the LY, which have no intention of ending soon, particularly with an opposition alternative being proposed. The special defense budget debate is now the central variable: if the LY cannot reach a workable compromise soon, Taiwan risks procurement delays in the earliest phases of an FMS case. The budget drama also sends mixed signals to allies and adversaries of Taiwan on its willingness to provide for its own defense. However, the TPP’s emphasis on greater transparency and oversight would be welcome for providing more information about how arms sale cases are progressing—or stalling.

Taiwan Arms Backlog Data_January 2026 Download

Weekly Arms Update: 2/11/26

Author: Joe O’Connor, Shikhar Chaturvedi, Danielle Kremer, and Wyeth Lindberg

This week: the Ministry of National Defense warns that some sales are in peril due to budgetary constraints; the Navy’s Hai Kun indigenous submarine finishes testing; the Air Force announces a plan to buy upgraded C-130H Hercules; and the MND announces additional PAC-3 MSE missiles on the way to Taiwan, alongside weekly awards and solicitations.

MND Announces LOA Extensions for Missiles, Paladins

On Friday, the MND announced that they would be seeking extensions to Letters of Offer and Acceptance (LOAs) for several arms sales announced in December, including TOW and Javelin anti-tank missiles, and Paladin self-propelled howitzers. LOAs are a critical first step in the Foreign Military Sales implementation process that sets out payment schedules and delivery timelines for items, and if not signed by March 15, the above cases would be subject to cancellation or renegotiation. Per the MND, the LOAs have not been signe,d and initial payments have not been made owing to ongoing battles in the Legislative Yuan over the special defense budget, including dueling proposals worth NT$1.25 trillion that the MND requested, and one worth NT$400 billion advanced by the opposition.

Hai Kun Submarine Continues Testing Exercises

With Taiwan’s indigenously produced Hai Kun submarine conducting its most recent underwater test of flare and decoy deployment, the first phase of the program’s testing has officially come to a successful end. These tests off the coast of Kaohsiung included deep water dives with the submarine reaching 150 meters, and shallow water tests to verify the submarine’s stability and watertightness. The second phase of testing, its timing having not been announced, will consist of sonar, combat system, and maneuver-torpedo tests. Taiwanese military and political officials plan to use this new phase to verify the reliability of the Hai Kun.

ROCAF Announces Plan to Buy Upgraded C-130Hs

Taiwan’s Air Force has essentially abandoned its mid‑life “Taiwushan III” plan to upgrade all 20 C‑130H airlifters, moving instead to buying 10 new C-130J “Super Hercules,” after U.S. cost estimates ballooned from around NT$100 billion for cockpit and avionics upgrades to more than NT$250 billion once FAA certification and structural reinforcements were included. According to Central News Agency reporting, the cancelled program aimed to integrate digital flight displays, improve maritime search‑and‑rescue systems and add simulators, but senior officers said software costs and airframe reinforcement made the investment uneconomical. Under the new plan, the Air Force will pursue a “high–low mix”: the advanced C‑130J, with more powerful engines, six‑bladed propellers and a fully digital cockpit, will handle demanding missions like nighttime and austere operations, while the remaining C‑130Hs will get domestic upgrades and support routine transport tasks.

Additional PAC-3 MSE Missiles Confirmed by MND

On Wednesday, MND sources confirmed that Taiwan is receiving 102 PAC-3 Missile Segment Enhancement (MSE) missiles for Patriot air defense systems, to be paid using surplus funds from a Patriot procurement program. This sale appears in our Arms Sales Backlog as a 2022 plus-up (modification) from a 2010 sale of Patriot systems to Taiwan, and includes the addition of 1-2 missiles, likely for testing. This tranche of PAC-3 MSEs is in addition to a planned, but not officially notified, future sale of Patriot batteries and PAC-3s that will be paid using the special defense budget.

Weekly Awards/Solicitations

Last Thursday, the All-Out Defense Mobilization Agency awarded Xinshifu Co., Ltd and Shencai Fashion Industry Co., Ltd a NT$142.85 million (US$4.53 million) contract for digital camouflage-patterned tents. The contract will be fulfilled nationwide.

On Monday, the Armaments Bureau solicited bids for combat battle vests, worth NT$868.40 million (US$27.70 million).

On Tuesday, the Naval Command awarded a NT$195.00 million (US$6.22 million) contract to the American Institute in Taiwan for the assessment of the use of underwater technology. The contract will be fulfilled in Taipei’s Zhongshan District and Taoyuan’s Longtan District, respectively.

Weekly Arms Update: 2/4/26

Authors: Joe O’Connor, Shikhar Chaturvedi, Danielle Kremer, and Wyeth Lindberg

This week: MND announces that NASAMS will be deployed to current SHORAD units, a status update on last Abrams tank deliveries emerged, the MND released a policy document with details about naval, wheeled vehicle, and missile procurement, and the Air Force expressed interest in buying new early warning aircraft, alongside weekly awards and solicitations.

NASAMS To Be Given to Antelope, 20mm AD Units

As part of Taiwan’s ongoing air defense modernization, the MND announced this week that US-sold National Advanced Surface-to-Air Missile System (NASAMS) medium-range air defense batteries will replace Antelope and 20-mm short-range capabilities currently used by air-defense units. Per our Taiwan Arms Sales Backlog, this case remains in progress since its notification in November 2024, though a recent US$698.95 million (NT$21.8 billion) U.S. Army production contract awarded to Raytheon for the first three NASAMS fire units signals the beginning of the manufacturing phase, with completion expected by 2031.

Last Tranche of Abrams Tanks to Arrive by March

Taiwan’s MND reported that it would receive its final batch of 28 M1A2T Abrams tanks by March of this year, confirming an MND report to the LY submitted in May 2025. This will be the third batch of Abrams, originally approved in July 2019 sent from the United States to the Taiwanese Army. The first batch of 38 tanks arrived in December 2024, being commissioned in October 2025; and the second batch, sent in July 2025, is still awaiting commissioning; totaling 108 tanks. The sale, which remains backlogged until delivery is confirmed, is worth $1.28 billion USD (NT$40.52 billion).

MND Releases Procurement Policy Document

On Friday, the MND released their “List of Regulated Military Products for the Second Half of 2025,” a policy document outlining controlled procurement items and timelines for future projects, including naval vessels, wheeled vehicles, and indigenous missile programs.

Most importantly, the Navy listed plans to procure several classes of vessels, including five next-generation light anti-air frigates, five light anti-submarine frigates, two rescue ships, one submarine rescue ship, one new Yushan-class dock landing ship, and one oil/ammunition replenishment ship. These projects have a total estimated cost of NT$315 billion (US$9.97 billion) and are expected to be built between 2027 and 2040.

The MND also announced plans to produce 500 additional Clouded Leopard infantry fighting vehicle variants equipped with 105mm cannons, alongside 468 “reconnaissance and tactical wheeled vehicles,” beginning in 2028. Lastly, the list announced plans to procure 2 launchers and 128 missiles for the Strong Bow anti-ballistic missile defense system, still under development and part of the proposed “T-Dome” air defense system.

Air Force Briefed by L3Harris on AEW Aircraft Buy

Per UpMedia, the Air Force Command recently received a briefing from American defense contractor L3Harris on options for commercial procurement of early-warning aircraft. This comes after repeated requests for procurement of E-2D Hawkeye aircraft and MH-60R Black Hawk anti-submarine helicopters were blocked by the United States, and the Air Force’s desire to upgrade aging early warning airframes. L3Harris is the primary manufacturer of the EA-37B Compass Call aircraft, a modified Gulfstream G550 business jet that has recently been commercially sold to other US allies, including Italy.

Weekly Awards/Solicitations

Last Thursday, the Naval Command awarded Van Halteren Technologies a NT$756.06 million (US$23.89 million) open-ended contract for naval “drive and control” spare parts. The contract will be fulfilled throughout the southern region of Taiwan, including Kaohsiung.

Also on Thursday, the Air Force Command awarded a NT$589.83 million (US$18.64 million) contract to Rheinmetall Italia SPA for maintenance of aircraft training simulator systems. This contract is to be fulfilled throughout the southern region of Taiwan.

On Friday, the Naval Command’s Magong Logistics Support Command made a repeat bid solicitation for the renovation of Magong Naval Base’s mobilization depot, worth NT$49.00 million (US$1.55 million).

On Monday, the Army Logistics Command solicited bids for rifle magazine bags, worth NT$32.48 million (US$1.03 million).

On Wednesday, the Air Force Command solicited bids for a high-voltage power supply renovation turnkey project at Tainan Air Base, part of Tainan Airport, worth NT$402.67 million (US$12.75 million).

Weekly Arms Sales Tracker: 1/28/26

Author:Joe O’Connor

This week: US and Taiwanese companies partner on drones, a former ROCA commander reveals details about the sale of Abrams tanks to Taiwan, the TPP issues their own special budget proposal, the Navy prepares dive tests on its Hai Kun submarine, alongside weekly awards and solicitations.

Taiwanese GTOC and US Companies Partner on Drones

On Friday, Taiwanese company G-Tech Optoelectronics Corp. (GTOC) and US companies Aerkomm and Firestorm Labs signed strategic partnerships to establish a military-grade drone industrial chain in Taiwan. GTOC Chairman Huang Kun-chien stated at the event that the Ukraine conflict has changed thinking on drone usage, and that supply chain resilience is critical. Firestone Labs was founded just before the Ukraine war as an innovator, while Aerkomm brings significant aerospace and satellite communications to the partnership. As a part of the strategic partnership, the three companies will embark on “decentralized production [and] localized support” models to produce drones.

Ex-Army Commander Reveals Abrams Sale Expedited

Former Army Deputy Commander Lt. Gen. Huang Kuo-ming told Liberty Times this week that the sale of M1 Abrams tanks to Taiwan was actually directly negotiated with the American Institute in Taiwan (AIT), the United States’ de facto embassy, bypassing the Ministry of National Defense’s normal procedures. Huang stated that the MND was focusing on air and naval capabilities, while the Army urgently needed new tanks. Huang proposed that the Army go directly to the AIT and received permission from the Army’s then-commander. When the AIT was receptive to the idea of the sale, Gen. Huang then sent then-Col. Huang Wen-chi to the US to brief US officials on the sale. According to Gen. Huang, the MND was surprised when the sale was announced to hear that the Army had already been in discussions with the US on its own.

TPP Issues Special Budget Proposal, Cuts to NT$400 Billion

On Monday, the Taiwan People’s Party (TPP), an opposition party in the Legislative Yuan, released its proposal for a special defense budget, reducing the budget ceiling from NT$1.25 trillion (US$40 billion) to NT$400 billion (US$12.74 billion) and mandating additional oversight. On Tuesday, the MND held its own press conference in opposition to the TPP’s proposal, criticizing it as hasty and unprofessional, and providing clarification. Director of the MND Strategic Planning and Operations Department, Maj. Gen. Huang Wen-chi, provided background on project development and the Five-Year Force Structure Plan, stating that the TPP’s proposal would not allow for revision of project documents within an appropriate timeline, and that additional oversight is not required as each project must undergo audits by the MND’s Audit Department alongside LY oversight.

Navy’s Hai Kun Submarine Undergoes Dive Tests

On Wednesday, CSBC announced that the Navy’s Hai Kun indigenous submarine will conduct its first dive trial off Kaohsiung on Thursday, 29 January. Construction on Hai Kun began in November 2020, its keel was laid in November 2021, and it last completed sea trials in June 2025. The testing program has been beset by technical problems, including hydraulic issues and a main engine failure, and has drawn criticism over cost overruns and inefficiencies. CSBC has pushed back, arguing that Hai Kun is cheaper than comparable South Korean or Australian programs and should be considered a “mid-range” submarine in terms of price.

Weekly Awards/Solicitations: Ammunition, Ship Parts

On Thursday, the Army Command awarded a NT$238.03 million (US$7.58 million) contract to Shaoteng Construction Co. for renovation of 30-mm cannon training facilities. The contract will be fulfilled in Kaohsiung City. 30-mm cannons are used on the CM34 variant of the Clouded Leopard APC.

On Friday, the Naval Command awarded a NT$1.39 billion (US$44.37 million) contract to Wartsila Taiwan, Ltd., for main engine spare parts and logistics support services for naval vessels. The contract’s fulfillment location was not stipulated.

On Monday, the Tactical Control Wing, Air Force Command awarded an NT$735.58 million (US$23.54 million) contract to NCSIST for reconnaissance radar auxiliary facility maintenance. The contract will be fulfilled in Wufeng Township, Hsinchu County. This is likely for the Air Force Surveillance and Early Warning Center, a PAVE Phased Array Warning System with a purported range of ~3,000 nautical miles.

On Wednesday, the Army Ordnance Maintenance and Development Center, Army Logistics Command awarded a NT$288 million (US$9.22 million) contract to the Armament Bureau’s 209th Factory for commercial repair and maintenance of 40-mm grenade launcher variants of the CM-32/33 Clouded Leopard APC. On the same day, the Center also awarded a NT$186 million (US$5.95 million) contract to NCSIST’s Manufacturing Center for commercial repair and maintenance of 30-mm autocannon turret systems on CM-34 Clouded Leopard APCs. Both contracts will be fulfilled at the Center’s headquarters in Jiji Township, Nantou County.

Also on Wednesday, the Armaments Bureau awarded a NT$1.07 billion (US$34.10 million) contract to Cheng Yuen International Co. and Taiwan HoYa International Co. for 7.62-mm blank cartridges and 3 other ammunition items. The contract will be fulfilled in Dashu District, Kaohsiung City.