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Market Research Report

Future of the Taiwanese Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2023

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Future of the Taiwanese Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2023
Published: December 14, 2018 Content info: 85 Pages
Description

"Future of the Taiwanese Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2023", published by GlobalData, provides readers with detailed analysis of both historic and forecast defense industry values, factors influencing demand, the challenges faced by industry participants, analysis of industry leading companies, and key news.

This report offers detailed analysis of Taiwanese defense industry with market size forecasts covering the next five years. This report will also analyze factors that influence demand for the industry, key market trends, and challenges faced by industry participants.

In particular, it provides an in-depth analysis of the following -

  • Taiwanese defense industry market size and drivers: detailed analysis of Taiwanese defense industry during 2019-2023, including highlights of the demand drivers and growth stimulators for the industry. It also provides a snapshot of the country's expenditure and modernization patterns
  • Budget allocation and key challenges: insights into procurement schedules formulated within the country and a breakdown of the defense budget. It also details the key challenges faced by defense market participants within the country
  • Porter's Five Force analysis of Taiwanese defense industry: analysis of the market characteristics by determining the bargaining power of suppliers, bargaining power of buyers, threat of substitution, intensity of rivalry, and barriers to entry
  • Import and Export Dynamics: analysis of prevalent trends in the country's imports and exports over the last five years
  • Market opportunities: details of the top five defense investment opportunities over the next 10 years
  • Competitive landscape and strategic insights: analysis of the competitive landscape of Taiwanese defense industry. It provides an overview of key players, together with insights such as key alliances, strategic initiatives, and a brief financial analysis.

Scope

  • Taiwan's military expenditure stands at US$10.9 billion in 2018 and the main factors driving this growth are the rapid modernization of the country's armed forces in recent years and the People's Republic of China's (PRC) assertiveness with regards to territorial claims.
  • The capital expenditure allocation, which stood at an average of 18.2% during the historic period, primarily due to the country's procurement contracts for corvettes, diesel-electric submarines, missile defense systems, and multi-role aircraft.
  • Taiwanese defense imports witnessed substantial growth over the period 2013-2017. Imports in 2013 were low due to delayed deliveries by the US, which was under pressure from the People's Republic of China (PRC), however, to compensate this, Taiwan started importing engines from Germany. During the forecast period, the US is expected to remain the largest supplier of defense equipment as other countries are reluctant to supply military equipment due to pressure from the People's Republic of China (PRC). The country's imports were highest in 2014 due to the procurement of air defense systems, missiles, and aircraft.

Reasons to buy

  • This report will give the user confidence to make the correct business decisions based on a detailed analysis of Taiwanese defense industry market trends for the coming five years
  • The market opportunity section will inform the user about the various military requirements that are expected to generate revenues during the forecast period. The description includes technical specifications, recent orders, and the expected investment pattern by the country during the forecast period
  • Detailed profiles of the top domestic and foreign defense manufacturers with information about their products, alliances, recent contract wins, and financial analysis wherever available. This will provide the user with a total competitive landscape of the sector
  • A deep qualitative analysis of Taiwanese defense industry covering sections including demand drivers, Porter's Five Forces Analysis, Key Trends and Growth Stimulators, and latest industry contracts.
Table of Contents
Product Code: GDDF0537MR

Table of Contents

1. Introduction 7

  • 1.1. What is this Report About? 7
  • 1.2. Definitions 7
  • 1.3. Summary Methodology 9
  • 1.4. About GlobalData 10

2. Executive Summary 11

3. Market Attractiveness and Emerging Opportunities 12

  • 3.1. Current Market Scenario 13
    • 3.1.1. Primary Threat Perception 13
    • 3.1.2. Military Doctrine & Strategy 14
    • 3.1.3. Military Fleet Size 16
    • 3.1.4. Procurement Programs 21
    • 3.1.5. Social, Political and Economic Environment & Support for Defense Projects 24
    • 3.1.6. Political and Strategic Alliances 25
  • 3.2. Defense Market Size Historical and Forecast 26
    • 3.2.1. Taiwanese defense budget to grow at an estimated CAGR of 3.28% during 2019-2023 26
    • 3.2.2. Issue of One China anticipated to drive military expenditure 28
    • 3.2.3. Defense budget as a percentage of GDP will remain at an average of 1.93% over the forecast period 29
  • 3.3. Analysis of Defense Budget Allocation 31
    • 3.3.1. Share of capital expenditure is expected to increase during the forecast period 31
    • 3.3.2. Capital expenditure is anticipated to record a CAGR of 3.41% during the forecast period 33
    • 3.3.3. Taiwan's per capita defense expenditure is expected to increase during the forecast period 35
  • 3.4. Homeland Security Market Size and Forecast 37
    • 3.4.1. The homeland security market in Taiwan is expected to grow at a CAGR of 1.50% during the forecast period 37
    • 3.4.2. Human trafficking to drive homeland security expenditure 39
    • 3.4.3. Taiwan falls under "Some risk" category in the terrorism index 40
    • 3.4.4. Taiwan faces very low threat from terrorist organizations 41
    • 3.4.5. Taiwan has a terrorism index score of 0.5 43
  • 3.5. Benchmarking with Key Global Markets 44
    • 3.5.1. Taiwanese defense expenditure expected to remain low compared to leading spenders 44
    • 3.5.2. Taiwan will continue to remain as a small contributor in the global arms market 46
    • 3.5.3. Defense budget as a percentage of GDP is expected to remain low over the forecast period 47
  • 3.6. Market Opportunities: Key Trends and Drivers 48
    • 3.6.1. Top 10 Defense Sectors by Value (US$ Million) - Projections over 2018-2023 48
    • 3.6.2. Destroyers 49
    • 3.6.3. Diesel-electric Submarine 50
    • 3.6.4. Land-based C4ISR 51

4. Defense Procurement Market Dynamics 52

  • 4.1. Import Market Dynamics 54
    • 4.1.1. Defense imports increased during the period 2013-2017 54
    • 4.1.2. The US, Germany, and Italy are the major defense equipment suppliers for Taiwan 55
    • 4.1.3. Aircraft, Missiles and Naval Vessels accounted for a total share 84.9% in Taiwanese defense imports 56
  • 4.2. Export Market Dynamics 57
    • 4.2.1. Taiwan defense exports was very low during 2013-2017 58
    • 4.2.2. Central American countries are the major prospects for Taiwanese defense exports 59

5. Industry Dynamics 60

  • 5.1. Five Forces Analysis 60
    • 5.1.1. Bargaining power of supplier: High 61
    • 5.1.2. Bargaining power of buyer: Medium 61
    • 5.1.3. Barrier to entry: High 61
    • 5.1.4. Intensity of rivalry: Low 61
    • 5.1.5. Threat of substitution: Low 62

6. Market Entry Strategy 63

  • 6.1. Market Regulation 63
    • 6.1.1. The government encourages offsets to develop the domestic defense industrial base 63
  • 6.2. Market Entry Route 64
    • 6.2.1. Budgeting process 64
    • 6.2.2. Procurement Policy and Process 64
    • 6.2.3. Foreign equipment manufacturers enter the market through direct commercial sales 64
    • 6.2.4. Foreign military sales is the viable market entry route for foreign defense companies 65
    • 6.2.5. Biennial defense exhibition provides an attractive entry route 65
  • 6.3. Key Challenges 66
    • 6.3.1. Corruption and lack of transparency are the factors which hinders the growth of the Taiwanese defense industry 66
    • 6.3.2. Delay of procurement programs will lead to cost overruns 66
    • 6.3.3. Lack of sales agents and stringent regulations restrict domestic defense industry growth 66

7. Competitive Landscape and Strategic Insights 67

  • 7.1. Competitive Landscape Overview 67
  • 7.2. Key Domestic Companies 69
    • 7.2.1. Aerospace Industrial Development Corporation (AIDC): overview 69
    • 7.2.2. Aerospace Industrial Development Corporation (AIDC): products 69
    • 7.2.3. Aerospace Industrial Development Corporation (AIDC): recent announcements and strategic initiatives 69
    • 7.2.4. Aerospace Industrial Development Corporation (AIDC): alliances 70
    • 7.2.5. Aerospace Industrial Development Corporation (AIDC): recent contract awards 70
    • 7.2.6. Chung-Shan Institute of Science and Technology (CSIST): overview 71
    • 7.2.7. Chung-Shan Institute of Science and Technology (CSIST): products 71
    • 7.2.8. Chung-Shan Institute of Science and Technology (CSIST): recent announcements and strategic initiatives 72
    • 7.2.9. Chung-Shan Institute of Science and Technology (CSIST): alliances 72
    • 7.2.10. China Shipbuilding Corporation (CSBC), Taiwan: overview 73
    • 7.2.11. China Shipbuilding Corporation (CSBC), Taiwan: products 73
    • 7.2.12. China Shipbuilding Corporation (CSBC), Taiwan: alliances 73
    • 7.2.13. The Combined Service Forces (CSF): overview 74
    • 7.2.14. The Combined Service Forces (CSF): products 74
    • 7.2.15. The Combined Service Forces (CSF): alliances 74

8. Business Environment and Country Risk 75

  • 8.1. Economic Performance 75
    • 8.1.1. GDP per capita at constant prices (US$) 75
    • 8.1.2. GDP at current prices (US$) 76
    • 8.1.3. Exports of goods and services (NT$ Bn) 77
    • 8.1.4. Imports of goods and services (NT$ Bn) 78
    • 8.1.5. LCU per US$ (period average) 79
    • 8.1.6. Goods exports as a percentage of GDP 80
    • 8.1.7. Goods imports as a percentage of GDP 81
    • 8.1.8. Services imports as a percentage of GDP 82
    • 8.1.9. Services exports as a percentage of GDP 83
    • 8.1.10. Net Foreign Direct Investment as % of GDP 84

9. Appendix 85

  • 9.1. About GlobalData 85
  • 9.2. Disclaimer 85

List of Tables

  • Table 1: Taiwan (Republic of China) Ground Forces Strength 16
  • Table 2: Taiwan (Republic of China) Air Force Strength 18
  • Table 3: Taiwan (Republic of China) Navy Strength 19
  • Table 4: Taiwan - Ongoing Development and Procurement Programs 21
  • Table 5: Taiwan - Future Procurement Programs 22
  • Table 6: Taiwanese - Top Defense Procurement Programs by Value (US$ Million), 2018-2023 23
  • Table 7: Taiwanese Defense Expenditure (NT$ billion& US$ billion), 2014-2023 26
  • Table 8: Taiwanese GDP Growth and Defense Expenditure as Percentage of GDP Growth, 2014-2023 29
  • Table 9: Taiwanese Defense Budget Split Between Capital and Revenue Expenditure (%), 2014-2023 31
  • Table 10: Taiwanese Defense Capital Expenditure (NT$ Billion & US$ Billion), 2014-2023 33
  • Table 11: Taiwanese Per Capita Defense Expenditure (US$), 2014-2023 35
  • Table 12: Taiwanese Homeland Security Expenditure (NT$ billion & US$ billion), 2014-2023 37
  • Table 13: Terrorism Index, 2018 41
  • Table 14:Benchmarking with Key Markets - 2014-2018 vs. 2019-2023 44
  • Table 15: Top Sweden Defense Sectors by Value (US$ Million), 2018-2023 48
  • Table 16: Defense Offset Regulations in Taiwan 63
  • Table 17: Taiwan Budget Formation Timetable 64
  • Table 18: Top Defense Suppliers in the Swedish Defense Industry - By Value (US$ Million) 2018-2023 67
  • Table 19: Competitive Landscape of the Taiwan Defense Industry 68
  • Table 20: Aerospace Industrial Development Corporation (AIDC) - Product Focus 69
  • Table 21: Aerospace Industrial Development Corporation (AIDC) - Alliances 70
  • Table 22: Taiwan Aerospace Industrial Development Corporation (AIDC) - Recent Contract Wins 70
  • Table 23: Chung-Shan Institute of Science and Technology (CSIST) - Product Focus 71
  • Table 24: Chung-Shan Institute of Science and Technology (CSIST) - Alliances 72
  • Table 25: China Shipbuilding Corporation (CSBC) - Product Focus 73
  • Table 26: China Shipbuilding Corporation (CSBC), Taiwan- Alliances 73
  • Table 27: The Combined Service Forces (CSF) - Product Focus 74
  • Table 28: The Combined Service Forces (CSF) - Alliances 74

List of Figures

  • Figure 1: Taiwanese Defense Expenditure (NT$ Billion), 2014-2023 27
  • Figure 2: Taiwanese Defense Expenditure (US$ Billion), 2014-2023 27
  • Figure 3: Taiwan GDP Growth and Defense Expenditure as Percentage of GDP Growth,2014-2023 30
  • Figure 4: Taiwanese Defense Budget Split Between Capital and Revenue Expenditure (%),2014-2023 32
  • Figure 5: Taiwanese Defense Capital Expenditure (NT$ Billion), 2014-2023 34
  • Figure 6: Taiwanese Defense Capital Expenditure (US$ Billion), 2014-2023 34
  • Figure 7: Taiwanese Per Capita Defense Expenditure (US$), 2014-2023 36
  • Figure 8: Taiwanese Homeland Security Expenditure (NT$ Billion), 2014-2023 38
  • Figure 9: Taiwanese Homeland Security Expenditure (US$ Billion), 2014-2023 38
  • Figure 10: Terrorism Heat Map, 2018 40
  • Figure 11: Terrorism Index, 2018 43
  • Figure 12: Benchmarking with Key Markets, 2014-2018 vs. 2019-2023 45
  • Figure 13: Defense Expenditure of the World's Largest Military Spenders (US$ billion),2018 and 2023 46
  • Figure 14: Defense Expenditure as a Percentage of GDP of Largest Military Spenders (%), 2018 47
  • Figure 15: Destroyers Market Size (US$ Million), 2018-2023 49
  • Figure 16: Diesel-electric Submarine Market Size (US$ Million), 2018-2023 50
  • Figure 17: Missile Defense Systems Market Size (US$ Million), 2018-2023 51
  • Figure 18: Top Taiwanese Defense Procurements in Terms of Their Supplier Relationships 53
  • Figure 19: Taiwan Defense Import Trend (US$ Million), 2013-2017 (TIV values*) 54
  • Figure 20: Taiwanese Defense Imports by Country (%), 2013-2017 55
  • Figure 21: Taiwanese Defense Imports by Category (%), 2013-2017 56
  • Figure 22: Taiwanese Defense Export Trend (US$ Million), 2013-2017 (TIV values) 58
  • Figure 23: Taiwan Defense Exports by Country (%), 2013-2017 59
  • Figure 24: Industry Dynamics Porter's Five Forces Analysis 60
  • Figure 25: Taiwan's GDP Per Capita at Constant Prices (US$), 2015-2025 75
  • Figure 26: Taiwan's GDP at Current Prices (US$ Billion), 2015-2025 76
  • Figure 27: Exports of goods and services (NT$ Million), 2005-2014 77
  • Figure 28: Imports of goods and services (NT$ Billion), 2005-2014 78
  • Figure 29: Taiwan's NT$ per US$, 2015-2024 79
  • Figure 30: Taiwan- Goods exports as a % of GDP (%), 2005-2014 80
  • Figure 31: Taiwan- Goods imports as a % of GDP (%), 2005-2014 81
  • Figure 32: Taiwan- Services imports as a % of GDP (%), 2005-2014 82
  • Figure 33: Taiwan- Services exports as a % of GDP (%), 2005-2014 83
  • Figure 34: Taiwan- Net Foreign Direct Investment as % of GDP 2005-2012 84
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