Taiwan Defense Stocks Waver as Markets Weigh Budget Boost

By Jason Chau

Taiwan defense stocks retreated Thursday morning, giving back gains fueled by hopes of higher government spending--an outlook analysts say is uncertain.

Shares of defense-related companies had climbed in Taipei over the past week on expectations the government would boost its budget amid heightened geopolitical tensions.

Taiwanese President President Lai Ching-te's pledge to introduce a $40 billion supplementary defense budget saw the sector rising Wednesday, with the momentum quickly fading.

Aerospace Industrial Development Corp., Magnate Technology and Aero Win Technology were down 4%-6% at midday, reversing nearly 10% gains from the previous session.

The benchmark Taiex index was last up 0.3%.

Analysts say the early-week gains were driven by an op-ed Lai wrote for the Washington Post outlining his plan for additional defense spending.

Lai's opinion piece "shows there is a stronger commitment to increase defense spending," said Allan von Mehren, chief analyst at Danske Bank, attributing the op-ed as a catalyst for the rally.

Eyck Freymann of the Hoover Institution at Stanford University said Taiwan needs major investments in its drone supply chain, counter-drone technologies and strategic stockpiles of key industrial inputs.

Macquarie analyst Jeffrey Ohlweiler said drone makers, including Aerospace Industrial Development, Evergreen Aviation Technologies and Thunder Tiger, would benefit, along with shipbuilders such as CSBC and Lungteh Shipbuilding which also stand to gain.

Write to Jason Chau at jason.chau@wsj.com

(END) Dow Jones Newswires

November 27, 2025 01:09 ET (06:09 GMT)