Authors: Joe O’Connor, Shikhar Chaturvedi, Danielle Kremer, & Wyeth Lindberg
This week: special budget negotiations remain stalled, as internal fractures emerge; a Lockheed earnings call gives details on delayed F-16s; the final batch of Abrams tanks are delivered to Taipei; and information comes out about ROCN plans to use V-BAT drones on ships, alongside weekly awards and solicitations.
Special Budget: Negotiations Stall, KMT Fractures Emerge
Negotiations on the budget this week continued, with two consultations in the Legislative Yuan’s Foreign Affairs and National Defense Committee ending with little to no consensus reached. A hearing on Thursday elicited some agreement on execution provisions, including members agreeing on LY oversight of reallocation of funds and reporting requirements. The most recent hearing, on Monday, concluded after approximately an hour, with no resolution. LY Speaker Han Kuo-yu later told press that the next hearing would be scheduled for next week, on May 6.
Separately, internal discussions in the opposition Kuomintang (KMT) and Taiwan People’s Party (TPP) over a unified spending proposal continued, with rumors emerging that both had agreed on a budget ceiling of NT$800 billion (US$25.3 billion). An internal KMT caucus meeting today, however, revealed greater divisions, with members being split between the current proposal for NT$380 billion (US$12 billion), or NT$800 billion. This tension within the party escalated to an extent that KMT Vice Chairman Chi Lin-lien threatened to expel LY Speaker Han Kuo-yu from the party for his support of NT$800 billion in spending.
Lockheed Earnings Call Provides Updates on F-16
On Thursday, Lockheed Martin chief financial officer Evan Scott told shareholders in a quarterly earnings call that “issues during the flight test” of F-16 Block 70 fighter jets for Taiwan and Morocco contributed to a decline in profits and resultant delays in delivery. Scott also stated that “we are back on track with a successful flight test and plan to begin deliveries of the first aircraft as soon as this week.” It is unclear whether Taiwan or Morocco will receive airframes first, although previously, Minister of National Defense Wellington Koo stated that he thought they would begin receiving F-16s by September 2026.
Final Batch of Abrams Tanks Delivered to Taipei
On April 27th, the third and final batch of M1A2T Abrams tanks, purchased from the United States and equipped with 120mm smoothbore guns and incorporating advanced fire control and hunter-killer systems arrived at Taipei Port, totaling 108 tanks. The first batch consisted of 38 tanks and arrived in December of 2025; the second batch of 42 tanks arriving that July. According to sources, these 28 tanks are split: 10 are to be used by the Equipment and Training Department, while 14 will be allocated to the 269th Brigade. As for the other four tanks, there have been no further details on their disposition. Now that all tanks are present, they will participate in transition training, quality evaluations, and combat readiness. According to MND sources, if training progresses well, the tanks may be ready for service by the end of this year.
Representing 6.3% of the total US$31.72 billion backlog of U.S. arms sales to Taiwan, as tracked by Taiwan Security Monitor, the delivery of the Abrams represents completion of a US$2 billion sale, originally notified to the U.S. Congress in July 2019.
Future ROCN Ships to Include Space for V-BAT UAVs
Taiwan’s Navy is reportedly planning a “dual hangar” design for its next-generation combatant, with space to support both an MH-60R anti-submarine helicopter and a vertical takeoff and landing (VTOL) unmanned aerial vehicle (UAV). According to Liberty Times, the design evaluation case is expected to move forward in May, and military sources said the Navy has identified Shield AI’s V-BAT as the design reference for the unmanned aviation component. The requirement reportedly includes remote-control and guidance capabilities for the UAV.
The V-BAT’s manufacturer, Shield AI, signed a February 2026 agreement with NCSIST to integrate its Hivemind autonomy platform into Taiwan-developed unmanned systems, and the company says V-BAT is designed for maritime ISR and targeting in GPS-denied and communications-contested environments.
Weekly Awards/Solicitations
On Friday, the Naval Command made a repeat solicitation of bids for the procurement and installation of nuclear, biological, and chemical (NBC) protection training ground facilities, worth NT$1.51 billion (US$47.9 million).
On Monday, the Information and Communications Command made a repeat solicitation of bids for the licensing of cloud information services, worth NT$36.03 billion (US$1.14 billion).
On Tuesday, the Tactical Control Wing of the Air Force Command awarded NCSIST a NT$162.49 million (US$5.14 million) contract for maintenance of the Anyu logistics maintenance system for 2026–2030.
On Wednesday, the Naval Command made a repeat solicitation of bids for 266 transport trucks and 221 5-ton transport vans, worth NT$1.35 billion (US$42.53 million).
U.S. Contracts Relating to Taiwan
On Wednesday, the U.S. Army awarded Lockheed Martin an undefinitized contract action with a ceiling of US$1.13 billion (NT$35.75 billion) for production of High Mobility Artillery Rocket System (HIMARS) launchers, for U.S. forces and FMS customers, including Taiwan and four other countries. Work is expected to be completed by April 30, 2028.