The Weekly Wire: For Your Situational Awareness 8.22.19

 In Weekly Wire
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Highlights from TADTE 2019 and Drone Taiwan 2019

Aaron Lin, Senior Market Analyst

During August 15-17, two defense and aerospace exhibitions took place in Taipei, Taiwan: the biannual Taiwan Aerospace and Defense Technology Exhibition (TADTE) and the Taiwan International Drone Show 2019 (Drone Taiwan). Some of the highlights from the two shows include:

  • This year’s TADTE 2019 built on the 2017 reveal of the Chien Hsiang anti-radiation UAV, similar to the IAI Harpy/Harop. This year’s exhibition showcased a truck-based launcher that can carry 12 drones at once. Taiwan plans to spend over USD 2.5 billion over six years to develop and produce 104 drones. For comparison, India’s acquisition of 15 Harop UAVs cost about USD 10 million per UAV. The high cost may include additional R&D work that is required, as well as funds for associated launching systems, launching vehicles, and C4I.
  • The other unmanned aircraft to take center stage during TADTE 2019 was the Teng Yun UAS. The Teng Yun is a MALE UAS that Taiwan hopes to develop into an analog of the MQ-9 Reaper, capable of performing ISR and limited strike missions. Development of the Teng Yun began in 2009. Taiwan currently does not manufacture a light missile like the Hellfire or APKWS that can be used to give the Teng Yun a ground attack capability. There are currently no publicly acknowledged programs to domestically develop an appropriate missile or adapt a US missile onto the platform. The National Chung Shan Institute of Science and Technology, Taiwan’s primary developer of weapons, claims that they have rectified past issues of insufficient engine power from a reverse engineered Honeywell TPE331, thanks to a new agreement to supply TPE331 engines. The Teng Yun had to be redesigned over the past year to accept the engines.
  • Taiwanese company GEOSAT exhibited two unmanned vehicles. One was the MARS small VTOL UAS, which is marketed for search and rescue and reconnaissance missions. The other was the TITAN unmanned ground vehicle. TITAN is a relatively small vehicle, designed to carry up to 250kg of equipment or wounded personnel.
  • Mitsubishi Electric displayed a counter-UAS system that defends against drones through interference with ground control radio signals and GPS.
  • The Cloud Leopard M2 wheeled armored vehicle was displayed in infantry fighting vehicle (CM-34 designation) and mortar carrier variants. The Taiwanese Army plans to purchase 284 CM-34s, which will enhance mobility over the dense Taiwanese road network, where wheeled vehicles are preferable to the tracked vehicles that are still prominent in the force.
  • The Sea Oryx missile system is designed to shoot down cruise missiles and low-flying aircraft, like the RIM-116. While the system has appeared in the past two TADTE exhibitions, this year’s revealed the development of a mobile land-based version. This could potentially fill requirements for the defense of key installations such as air bases and radar sites from cruise missile attack.

Taiwan

On August 20, the US State Department announced the approval of a foreign military sale worth an estimated USD 8 billion for 66 F-16Vs (F-16C/D Block 70) to Taiwan. In the past month, 14 F-16s were sold to Slovakia and eight to Bulgaria. Lockheed Martin had originally planned to have all 66 aircraft delivered by 2027, but negotiations ultimately settled on a 2026 deadline. It is possible that some of the costs Taiwan will pay will go towards scaling up the Greenville production line to accommodate Taiwan’s schedule while also meeting schedules for other F-16 customers. Taiwan is already upgrading its existing 142 F-16A/Bs to the V standard, which should wrap up around 2023. Adding 66 new aircraft will allow Taiwan to retire about 20 old F-5s that are still in frontline service, and also help to address readiness issues with the Mirage 2000, for which spares have been difficult to obtain.

Japan

On August 16, Japan’s Ministry of Defense formally approved the purchase of 42 F-35B aircraft. The aircraft will be purchased with a unit cost of USD 132 million. Japan intends to modify its two Izumo-class helicopter destroyers to accommodate and operate the F-35B. Japan had expressed interest in the fighter aircraft due to the need to counter an array of potential threats – most notably North Korea and China. Additionally, the short take-off and vertical landing capability will allow the fighters to remain active even if airstrips are damaged. However, the modification of the destroyers could complicate the planned use of the fighters, as they are expected to be both difficult and expensive.

Finland

On August 16, the Finnish Ministry of Defense released its draft budget for 2020 which allocates EUR 3.16 billion (USD 3.5 billion) towards defense, slightly up from EUR 3.13 billion (USD 3.4 billion) in 2019. The 2020 draft budget plans to increase the procurement account to 43% (in EUR terms) of the overall budget, significantly higher than the 2019 budget which only allocated 28.5%. Finland is moving forward with two large purchases – a new fighter aircraft and a new multi-purpose surface combatant. These two programs will dominate procurement spending well into the 2020s. Finnish company Rauma Constructions was awarded a design contract for the surface combatant, while Saab has been shortlisted for the program’s combat systems requirement. Under the 2020 draft budget, EUR 20 million is expected to be appropriated for the HX fighter acquisition though a contract for the fighters isn’t expected until 2021. Finland will acquire 64 aircraft worth between USD 7-10 billion, and current bidders include Boeing’s F/A-18 Super Hornet, Dassault’s Rafale, the Eurofighter Typhoon, Saab’s Gripen, and Lockheed Martin’s F-35.

India

Facing the imminent retirement of its legacy MiG-21 fleet and the end of orders for the Su-30 MKI assembly line, the Indian government is seriously considering a new fighter purchase from the Russian government. The deal, which emerged from an October 2018 meeting of the countries’ military industrial cooperation commission, would see India acquire 18 additional assembly kits for the Su-30MKI as well as more than 20 used MiG-29 fighters upgraded to the Indian MiG-29 standard. Some reports also indicate that these purchases would be accompanied by the purchase of over 1,000 air-to-air missiles, including R-27 (AA-10 medium range missiles), R-73/74 (AA-11 short range missile), and R-77 (AA-12 medium range missile) variants.

This wave of purchases will supposedly be facilitated by recent contract measures and payment methods that India and Russia developed as a way around US sanctions. The two countries supposedly used a combination of special-purpose financial vehicles and niche application of their banking systems to execute the S-400 air-and-missile defense system deal, and they now plan to use those methods again to facilitate joint production agreements in India.

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