Observing the Chinese military's rapid pace of modernization and the war in Ukraine, where drones and satellites have shown their tactical values, Taiwan is gradually waking up to the reality of modern warfare and has stepped up its modernization pace. For the first time since 2022, Taiwan's defense ministry turned to domestic suppliers in the private sector to build commercial-grade military drones as well as anti-drone systems.
A budget of NT$7.13 billion (approximately US$219 million) would be spent to procure around 3,000 reconnaissance drones from the private sector between 2024-2028, while another NT$990 million would be spent to procure 26 anti-drone systems between 2024-25. In September 2023, Taiwan also unveiled its domestically built diesel-electric attack submarine prototype.
Known as Hai Kun, the prototype is awaiting the Sea Acceptance Test, and seven others are planned to upgrade Taiwan's submarine fleet. After a long delay, the country's indigenous guided-missile frigate program has also received a fresh boost.
Envisioned to be equipped with an equivalent of the Aegis Combat System for naval air defense through a seamlessly integrated radar and missile system, the planned frigate reportedly will procure the AN/SPY-7 active phased array radar from Lockheed Martin.
Admiral (retired) Richard Chen, who during his term as the head of Taiwan's Navy between August 2013 and January 2015 kickstarted the massive fleet modernization program, now seeks to initiate an overarching guidance framework for Taiwan's national security in his new role as a lawmaker in Taiwan's legislature. Together with military experts and professionals from various sectors, Chen already coordinated two tabletop exercises in 2023 and 2024, seeking to provide a Common Operational Picture (COP) of Taiwan's national security environment. When it comes to modernizing Taiwan's defense industry, the former admiral also sees the need for an overarching architecture to avoid some of the challenges that have long hindered Taiwan's defense industrial modernization.
Caption: Adm. Richard Chen commanded Taiwan's Navy from 2013 to 2015. Credit: MND
The delayed indigenous guided-missile frigate program is one of those examples showing the lack of overall guidance: as revealed by Chen, the frigate was originally conceived with a displacement of 6,000 tons but went through various adjustments under subsequent navy commanders. Its displacement was reduced to 4,500 tons, before being further reduced to 2,500 tons.
The change in radar requirement - from that of passive phased array (PESA) to active phased array (AESA) further complicated the technical challenges to fit the combat system into an ever smaller ship size. The original 6,000 tons specification was only reintroduced in the latest program adjustment.
Referring to the "Ends-Ways-Means" framework first introduced by US Army Colonel Arthur F. Lykke Jr. for strategic planning, Chen observed that the lack of drone doctrine and related field manuals in Taiwan's armed forces are now depriving them of clearly defined objectives, thus impeding drone development and procurement.
"Regulations unable to keep up with technology development"
"Doctrinal development in the drone world will be a globally shared journey that will come from experimentation and operations like in Ukraine and the Red Sea" observed Lt. General (retired) Steven Rudder, former commanding general of USMC Forces, Pacific, who led a delegation of 27 US defense contractors to participate in the 2024 Taiwan-US Defense Industry Forum in June. "As future warfare demands the assimilation of drones into an operational model, doctrine will be an ever-evolving process in this field, and we must embrace rapid innovation with a matching procurement and fielding strategy," said the former US Marine Corps commanding general, indicating that from US defense industry perspective, the drone environment and technology are changing very rapidly and the challenge is that Industry is innovating faster than the traditional procurement process.
Caption: General Steven Rudder served as the Commanding General of the United States Marine Corps Forces, Pacific. Credit: USMC
As the war in Ukraine fuels a new arms race that has already been underway against the backdrop of US-China rivalry, major military powers, especially those in the West, are seeking ways to inject new vitality into their defense sectors that had almost ground to a halt since the Iron Curtain lifted in the early 1990s. In the United States, venture capitals dedicated to the sector have emerged, and new organizations such as the Strategic Capabilities Office (SCO) and the Defense Innovation Unit (DIU) were created under the Pentagon to accelerate the battlefield applications of existing or new technologies.
To ensure the speed of technology adoption can catch up with that of technology development, of course, there have been efforts to speed up the acquisition process such as the recent US congressional review of the Pentagon's budgeting system - known as the Planning, Programming, Budgeting, and Execution (PPBE) process.
Though Chen perceives room for adjustment in Taiwan's budgeting system and a degree of flexibility in the military buildup process, in Taiwan's case, he sees the main challenge elsewhere. "It's less about the acquisition process failing to keep up with technology development, but more about regulations unable to keep up with technology development," remarked Chen, pointing out that though domestic companies boast the capabilities to produce thousands of drones, the command channel remains undefined. "The radiofrequency for drone command & control is not taken into consideration by the government, and the drone fleet could have no access to enough communication bandwidth when wartime frequency regulations take effect, even if one has thousands of drones." Chen therefore called on Taiwan's defense ministry to request more bandwidth from the governmental agency responsible for spectrum allocation and other telecommunications regulations.
Meanwhile, General Rudder sees collaboration opportunities between the US and Taiwanese defense industry in counter-drone and electromagnetic warfare sectors, noting that "both areas go hand in hand with drone operations."
Interoperability, a bridge too far?
"Taiwan's procurement procedures function well - from the US industry's standing point, the only major challenge is the difficulty in engaging Taiwan's Ministry of National Defense face-to-face. Defense companies struggle to get proper access to present their technologies and discuss them with the end-users," observed Rupert Hammond-Chambers, President of the US-Taiwan Business Council that recently co-hosted the 2024 Taiwan-US Defense Industry Forum. "President Lai's government has some work to do too in inter-agency coordination on a complete response to defense-related priorities," added Hammond-Chambers, calling for a more institutionalized process. Shortly after the forum in June, Washington approved a US$360 million sale of 291 Altius 600M-V loitering munitions as well as 720 Switchblade drones.
Caption: Rupert Hammond-Chambers, President of the US-Taiwan Business Council. Credit: CNA
"On the drone front, we will continue to bring over a myriad of companies engaged in drone development," said Hammond-Chambers. "Direct engagement is the fastest way to expedite domestic capabilities along with targeted Foreign Military Sales (FMS) cases such as MQ-9 Reaper and Switchblade." However, in terms of a common operational picture, there are also challenges. "If Taiwan is going to continue to move towards interoperability with US and allied militaries, they need to utilize a common communications platform - a huge challenge with an, as yet, unclear solution," he observed.
Satellite communication - a key component of battlefield communication - is an especially challenging aspect. "Satellite communication is a big and complicated challenge for Taiwan," said Hammond-Chambers, noting that though Taiwan can develop an indigenous satellite solution, it will come with technological boundaries. "Will the platforms and systems that sit on that communication platform be able to communicate and operate with the US and Japan? "
Taiwan's own DIU - a springboard to deeper TW-US defense industrial cooperation
"Technology is progressing at such a swift pace that it is impossible to conduct R&D on every aspect," Richard Chen replied when asked which technological area should be prioritized as the domestic defense industry pursues autonomy. "When it comes to components like semiconductors, of course, one can source from existing suppliers." However, as the private sector players seek to enter the defense industry, Chen mentioned the need to interface with other weapon systems - a capability traditionally provided by the National Chung-Shan Institute of Science and Technology (NCSIST).
The state-owned NCSIST has long been the main R&D and systems integration center of the Taiwanese defense industry. Even though the private sector is meant to take on a bigger role in the future, the legislator who now sits on the Foreign and National Defense Committee believes the institute will continue to be a key R&D player to ensure that certain critical technologies remain accessible if commercial sources are cut off.
As the new government in Taiwan takes steps to emulate the Pentagon's Defense Innovation Unit (DIU) that was first launched in 2015 to accelerate the military adoption of dual-use, cutting-edge technologies from the private sector, Chen pointed to risk-aversion as a major institutional challenge to such endeavors. The creation of Taiwan's own DIU nevertheless broadens the potential cooperation scope with the US defense industry.
"When we were briefed on the DIU, it was explained as a mechanism to expedite the fielding of new technologies as quickly as possible," said Hammond-Chambers, adding that the Taiwanese DIU's technological priorities remain unknown until it becomes operational. According to the US-Taiwan Business Council president, the US defense industry perceives Taiwan's creation of DIU positively, as they already feel such demand pull from the US.
As long as an appropriate organizational structure is in place, Hammond-Chambers believes Taiwan's own DIU should be a mechanism through which the US defense industry can engage with Taiwan, in line with the Pentagon's recent plan to strengthen defense industrial resilience with Indo-Pacific partners via collaborations on capacity expansion, defense innovation, and other dimensions.
