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Nov 4
Why defense's blue ocean is no smooth sailing for automakers
Although the defense market has emerged as a new blue ocean for the auto industry, entering it is far from smooth sailing. The main concern remains the national security sensitivities inherent in defense work. Amid international rivalry, automotive supply chains moving into defense can easily become targets, raising the risk that defense gains could shake companies' core automotive businesses. In addition, small, customized defense orders may offer limited profit margins, posing another concern for automakers.
As Taiwan's drone procurement program moves forward, the Navy is preparing to acquire more than 1,300 small suicide unmanned boats, with a budget approaching NT$30 billion (US$913 million). The tender could launch as early as the end of 2026, prompting local and overseas suppliers to form partnerships and showcase their capabilities at this week's Taiwan Ocean Technology and Unmanned Vehicle Show.
US space company SpaceX has developed reusable Falcon 9 and Falcon Heavy rocket boosters, saving between US$32 million and US$46.5 million every time a booster is reused. To date, SpaceX has completed over 650 rocket recoveries; even its payload fairings, valued at US$6 million each, are recoverable and reusable. As Taiwan's orbital rocket program is still in its infancy, the National Science and Technology Council (NSTC) has directed plans to invest in the manufacturing of reusable rocket modules.
Ukrainian defense tech company UFORCE, creator of the Magura unmanned surface vessel credited with disabling or sinking 19 Russian warships in the Black Sea and emerging as a primary threat to Russian naval operations, is actively forging ties with Taiwanese suppliers. Ukraine's real-world combat validation is positioned to act as a launchpad for Taiwanese manufacturers entering the global defense sector.
The Research Institute for Democracy, Society and Emerging Technology (DSET) released a report on November 4 at the 2026 Taiwan Marine Tech & Unmanned Robotics Expo (MATURE Taiwan), examining Taiwan's unmanned boat industry and international cooperation. Experts from Ukraine and the US urged Taiwan and its allies to connect technology networks and move faster.
Taiwan-based IC design house ELAN Microelectronics has announced that a joint proposal submitted with Thunder Tiger and Gallopwave—titled the "Domestic AI Smart Dual-Use Drone Platform and Advanced Handheld Ground Station Comprehensive Solution Project"—has passed review by the Ministry of Economic Affairs (MOEA) under its IC Top Program and received government subsidies. The project aligns with Taiwan's policy on dual-use drones, which mandates that UAVs procured by public-sector entities and utilized in commercial applications meet military-civilian shared-use standards.
As low capacity utilization, steep tariffs, and fierce competition from Chinese automakers pressure the industry, significant growth in European defense spending is opening new business opportunities for European and US automotive supply chains. Automakers are entering the defense sector through four main models, namely plant conversion, platform adaptation, protection and security, and autonomous logistics, channeling idle capacity and technological strengths into this new blue ocean.
Taiwan's Syncmold Enterprise grew its third-quarter 2026 revenue even as global PC shipments slumped 20.1%, with its expanding low Earth orbit (LEO) satellite business offering key support and emerging as the precision component maker's mid- to long-term growth engine.
Thunder Tiger has made steady progress in its unmanned aerial vehicle business while also pursuing opportunities in unmanned surface vessels (USVs). At the 2026 Taiwan Marine Tech & Unmanned Robotics Expo (MATURE Taiwan) held this week, Thunder Tiger conducted a live demonstration of its self-developed and self-manufactured SeaShark 600 USV. Chairman William Chen also outlined the company's research and development achievements for the SeaShark series.
Google's Project Suncatcher has crossed an important threshold in orbital computing after its prototype satellite successfully returned an AI response generated onboard using the Gemma 4 model, marking what the company calls the first successful inference from a data center-class tensor processing unit (TPU) in orbit.
OpenAI has appointed former US Army Secretary Daniel P. Driscoll as senior counselor for national security modernization, seeking to expand the use of artificial intelligence (AI) in national security and cybersecurity. Driscoll will advise the company's leadership on applying AI across both areas.
As AI and unmanned systems see wider adoption, the military's reliance on electricity continues to grow, making energy transition critical to maintaining combat capabilities. The South Korean Army made its debut at Smart Energy Plus (SEP) 2026, showcasing microgrids integrating solar power, energy storage systems (ESS), and hydrogen fuel cells, along with hydrogen-powered tactical vehicles and hydrogen fuel-cell drones to reduce dependence on external power grids.