Authors: Joe O’Connor, Shikhar Chaturvedi, Danielle Kremer, & Wyeth Lindberg
This week: the LY agreed to approve signature for four arms sales; MND officials provided updates on MQ-9B and PAC-3 procurement alongside low-cost air defense technology; a U.S. House hearing shed light on arms sales to Taiwan; and the MND confirmed the receipt of ALTIUS 600M drones, alongside weekly awards and solicitations.
Legislative Yuan Agrees to Approve LOA Signature
On Thursday, the Legislative Yuan’s Foreign Affairs and National Defense Committee agreed to allow Letters of Offer and Acceptance (LOAs) to be signed for four U.S. arms sale cases, three of which (Paladin self-propelled howitzers, TOW-2B, and Javelin anti-armor missiles), were set to expire on March 15. A fourth LOA for High Mobility Artillery Rocket Systems (HIMARS), received earlier last week with an expiry date of March 26, is also included in this agreement. The committee required that upon signing, however, the MND must immediately report delivery schedules to the LY and continue to engage in the ongoing legislative review process.
On March 18, DPP legislator Kuan-ting Chen stated to the press that the LY committee would schedule reviews of all three special defense budget proposals next week. Per Chen, the committee will have a Q&A session on March 23 (Monday) and undergo a clause-by-clause review on March 25-26 (Wednesday-Thursday). When asked, Chen also indicated he’d prioritize the Lai administration’s proposal, but aspects are open to negotiation and discussion.
LY Hearing Provides Updates on MQ-9B, PAC-3
On Monday, the LY’s Foreign Affairs and National Defense Committee then held a hearing on the status of Taiwan’s air defense network amid conflict in the Middle East. ROCAF Chief of Staff, Lieutenant General Lee Ching-jan, stated that the first two MQ-9B SeaGuardian maritime surveillance drones will be delivered to Taiwan by the third quarter of this year. MND officials also reiterated that the ongoing delivery of 102 PAC-3 Missile Segment Enhancement (MSE) missiles should not be affected by conflict in the Middle East, a concern that was also expressed about MQ-9B delays.
Details on Taiwan Arms Sales from U.S. House Hearing
During a March 17 House Foreign Affairs Committee hearing on “Reforming America’s Defense Sales,” U.S. officials reaffirmed that security assistance for Taiwan remains the administration’s “top priority.” Defense Security Cooperation Agency (DSCA) Director Michael F. Miller testified that his 2023 guidance prioritizing Taiwan over all other requirements remains active, specifically ensuring that if a “competition” for production capacity arises, Taiwan will maintain priority for deliveries like the Harpoon Coastal Defense Systems over other buyers such as Saudi Arabia. This emphasis follows the notification of a record US$11.1 billion arms package in December 2025, which includes HIMARS rocket systems, howitzers, and ALTIUS loitering munition drones designed to rapidly build asymmetric warfare advantages. While witnesses at the hearing addressed a US$21 billion backlog of undelivered weapons, TSM identifies the total value at US$32 billion in a recent February Arms Sales Backlog Update, noting that roughly 20% (US$6.26 billion) represents cases like the M1A2T Abrams tanks and Harpoons that are currently in partial delivery.
The hearing also clarified the diplomatic and legislative frameworks governing these sales amidst concerns over President Trump’s recent summit diplomacy with Xi Jinping. Despite the President’s suggestions that future packages might be discussed with Beijing, witnesses from both the State and Defense Departments stated they were unaware of any changes to the Six Assurances or longstanding U.S. policy. To address delivery bottlenecks, the committee discussed the “Porcupine Act”, which would categorize Taiwan as a “NATO plus” partner to raise notification thresholds, following the House passing a 2026 funding bill that includes US$2.3 billion in Foreign Military Financing (FMF) grants and loans. However, TSM analysis indicates that the strategic impact of these reforms is increasingly threatened by political gridlock in Taiwan’s Legislative Yuan, where delays in passing the NT$1.25 trillion special budget have left several Letters of Offer and Acceptance (LOAs) for asymmetric systems at risk of expiration. Despite these internal delays, physical deliveries of higher-end platforms continue, with the final batch of 28 M1A2T Abrams tanks currently “at sea” and expected to reach Taiwan by the end of March 2026.
MND Confirms ALTIUS 600s Delivered
According to a recent report from the Ministry of National Defense, as of March 18, the Taiwanese military has officially received all 600M ALTIUS UAVs purchased from the United States and defense contractor Anduril. These drones are said to have a range of up to 40km, along with anti-armor warheads and infrared detection capabilities. With this last delivery, the Taiwanese military now has up to 291 ALTIUS systems, costing approximately NT$9.6 billion (US$300 million). A second sale, announced in December, of 1,554 ALTIUS 700M and 478 ALTIUS 600M ISR drones, is currently in progress, but it is expected will be completed quickly owing to the speed of the first case, having only taken 14 months between notification and delivery.
Weekly Awards/Solicitations
On Thursday, the Army Logistics Command’s Army Ordnance Maintenance and Development Center awarded the 209th Factory a NT$800.00 million (US$25.14 million) contract for CM-32/33 APC maintenance kits. The contract is to be fulfilled in Jiji Township, Nantou County.
Also on Thursday, the Armaments Bureau awarded a NT$2.82 billion (US$88.52 million) contract to Pan Asia Engineering Construction Co., Ltd for the Hanyang Camp new construction project. The contract is to be fulfilled in Taoyuan City.
On Friday, the Army Command’s Military Mission to the United States awarded the American Institute in Taiwan a NT$67.59 million (US$2.12 million) contract for flares. While this award is to the AIT, it is likely for a U.S. defense contractor. The contract is to be fulfilled in the Rende District of Tainan and Pingtung City in Pingtung.
Also on Friday, the Armaments Bureau’s Production and Manufacturing Center made a repeat solicitation of bids for Night-vision detection equipment, worth NT$38.89 million (US$1.22 million).
On Monday, the Naval Command solicited bids for the purchase of new Hong Kong tugboats, worth NT$807.57 million (US$ 25.35 million).
On Wednesday, the Naval Command solicited bids for the procurement and installation of NBC protection training ground facilities, worth NT$1.51 billion (US$ 47.47 million).
U.S. Contracts Relating to Taiwan
On Tuesday, the Defense Logistics Agency awarded a US$470 million (NT$14.99 billion) contract to Pratt & Whitney, a division of RTX Corp., for the re-manufacturing of F100 engine modules. This contract uses Taiwan FMS funds alongside 12 other countries. F100 engines are used by F-16 Fighting Falcon fighter jets, as well as F-15s. Work is expected to be completed by March 2029.