Amid escalating geopolitical tensions, global defense spending is surging, transforming the sector into a strategic growth pillar alongside semiconductors. For Taiwan's ChenFull Precision Co., these two industries form the backbone of its operations. While the company's defense segment remains modest in scale, its gross margin approaches 70%—a remarkable figure that outpaces all other business units and now serves as a critical driver of ChenFull's broader corporate growth.
Taiwan military-grade power amplifier maker Transcom said it completed testing and certification for multiple products this year, including high-frequency solid state power amplifiers, up-conversion Doppler amplifiers, and high-frequency receivers. The company expects to receive military product certification in the second half of 2025.
Third-generation semiconductor GaN-on-SiC has emerged as a critical battleground in the US-China technology rivalry, with both nations racing to develop advanced military radar systems capable of detecting stealth aircraft.
Taiwan's drone industry continues to expand its global presence, with its latest move focused on fostering collaboration with Japan at the Japan Drone 2025 exhibition. Following its participation in the XPONENTIAL exhibitions in Europe and the United States earlier this year, Taiwan is now promoting supply chain integration and cross-border cooperation at Asia's leading drone event.
Russia's SJ-100 regional aircraft completed its maiden flight with a domestic PD-8 engine in April 2025, marking a milestone in the country's drive to replace Western components under international sanctions.
Market sources report that SpaceX, the low-earth orbit satellite giant founded by Tesla CEO Elon Musk, is accelerating its expansion into fan-out panel-level packaging (FOPLP). The company aims to establish a new advanced packaging factory "built in Texas." Before the Texas facility becomes operational, orders are currently being handled by STMicroelectronics. Due to strong demand, overflow orders have reportedly been subcontracted to Taiwan's major panel manufacturer Innolux.
Ukraine's recent drone operation, dubbed "Spider Web," has sent shockwaves through military establishments worldwide after successfully penetrating deep into Russian territory and destroying dozens of aircraft worth billions of dollars. The audacious attack demonstrates how inexpensive technology is fundamentally reshaping modern warfare economics and forcing a complete rethink of military strategy.
Starlink, the satellite internet service operated by Elon Musk's SpaceX, has received regulatory clearance to launch in South Korea. The rollout will mark the introduction of low Earth orbit (LEO) satellite networks in South Korea, poised to deliver high-speed internet connectivity to underserved and remote regions.
Aerospace fastener manufacturer NAFCO reported a 13.56% month-over-month decline in revenue for May 2025. The company attributed this drop primarily to exchange rate impacts and slower-than-expected new product certifications. While certification progress is expected to catch up in June 2025, the exchange rate effects remain difficult to control. Despite these challenges, NAFCO remains optimistic about its order book and prospects for the second half of 2025.
US Defense Secretary Pete Hegseth's recent Indo-Pacific security address highlighted two strategic priorities that underscore Taiwan's growing importance in regional defense planning: maritime drone capabilities and secure component supply chains.
President Ching-te Lai outlined Taiwan's space sector ambitions, positioning the island's information and communications technology expertise to capture opportunities in low-Earth orbit (LEO) satellites and ground equipment manufacturing. Taiwan's ground equipment output has reached NT$246.4 billion (approx. US$8.24 billion) with 18% annual growth, exceeding global market expansion rates.
More coverage
