Military

Aerospace Industrial Development Corporation (AIDC)

In the late 1960's, Taiwan's aerospace industry was founded in response to the implementation of national security and defense self-reliance policies mandated by the Taiwan authorities. Since the 1980's, Taiwan authorities have focused on the aerospace industry as a key strategic industry. As a result of these efforts, Taiwan possesses significant aircraft manufacturing capabilities.

The Aerospace Industrial Development CorporationAIDC (under the Ministry of Economic Affairs) is Taiwan's premier military and commercial aircraft and parts manufacturer. AIDC worked together with CSIST and Lockheed Martin to design and produce 130 Indigenous Defense Fighter (IDF) aircraft. In addition, AIDC has produced PL-1 Primary Trainers, T-CH-1 Basic Trainers, AT-3 Advanced Jet Trainers, UH-1 H Helicopters, and F-5A/E Fighters.

The Aerospace Industrial Development Corporation (AIDC), previously known as the Aero Industry Development Center, was established in March 1969 under the Ministry of National Defense. In July 1996 the military-run AIDC was restructured as a state-run enterprise under the Ministry of Economic Affairs. This conversion from military to public enterprise status is intended to facilitate the transfer of Taiwan's military aeronautic technology to the private sector while enabling AIDC to form joint ventures with high-tech foreign manufacturers. This in turn is expected to bring advanced aviation technology into Taiwan to accelerate the growth of its aerospace industry.

AIDC was founded to secure an aerospace manufacturing capability in Taiwan. AIDC began with the co-production of UH-1 helicopters and F-5 fighters and has since developed two indigenous jet aircraft, the AT-3 jet trainer and the Indigenous Defense Fighter (IDF). AIDC is the leading aircraft and aircraft engine manufacturer. AIDC, with a workforce of 5,000 highly skilled employees, has four major entities comprising an engineering department, an aircraft factory, an avionics factory, and an aero engine factory. Through joint ventures, technology transfers and assistance programs with foreign aerospace companies, AIDC has been able to manufacture and assemble a total of more than six hundred military aircraft and over three hundred aircraft engines. AIDC has successfully developed an indigenous defense fighter (IDF), now in full production. AIDC has joined a Sikorsky led team to co-produce the S-92 helicopter. Other cooperative programs include the MD-95 empennage development, 601k industrial engine and Ae-270 utility aircraft. AIDC has obtained quality-assurance and testing certificates for more than 200 aircraft parts from European and American aerospace companies.

One organization whose potential privatization has attracted a great deal of interest from the U.S. defense community is the Aerospace Industrial Development Corporation (AIDC). The AIDC owns an advanced aerospace manufacturing center, has several thousand skilled workers on the payroll and is one of the few organizations in Taiwan with actual aerospace manufacturing experience.

A proposal to privatize the Aero Industry Development Center was approved by the Legislature on May 16, 1995. This conversion from military to private status, under the supervision of the Ministry of Economic Affairs, is intended to facilitate the transfer of ROC military aeronautic know-how to the private sector while enabling the center to form joint ventures with high-tech foreign manufacturers. This in turn is expected to bring advanced aviation technology into Taiwan to accelerate the growth of the nation's aerospace industry. A period of three-and-a-half years has been granted to the center to carry out full privatization.

In July 1996 the military-run AIDC was restructured as a state-owned enterprise under the Ministry of Economic Affairs. However, this conversion did not privatize AIDC, but restructured it from a non-profit research center to a profit-seeking, but still state-owned corporation, which would operate on a commercial basis. This will enable the AIDC to form joint ventures with high-tech foreign manufacturers. While U.S. firms may find opportunities to cooperate with AIDC on specific projects, there is little to no chance that Taiwan would allow foreign entities to hold a significant equity stake in a corporatized AIDC.

AIDC has successfully developed an indigenous defense fighter (IDF), and completed the production of 130 IDF jetfighters for the Air Force early 2000. AIDC has joined a Sikorsky led team to co-produce the S-92 helicopter. It has started mass production of the cockpit section of the S-92 helicopter. AIDC also signed a contract with Sikorsky for the supply of passenger and crew doors for the S-76 helicopter. In addition to its work for Sikorsky, AIDC is also producing empennage sections for the Boeing B-717 (formerly known as the MD-95), the Alenia C-27J transport aircraft, and Bombardier Aerospace's BD-100 continental business jet. It is also co-producing the AE-270 commercial airplane (wings) with Vodochody of the Czech Republic and the CT-7 turbine engine (parts) with General Electric, the Allison 601 K-9 turbine engine (parts), the AlliedSignal ASE-120 turbine engine (parts), and AS-907 turbine engine (parts) with Honeywell and some parts for the A-3XX jumbo jet with Airbus. AIDC has obtained quality-assurance and testing certificates for more than 200 aircraft parts from European and American aerospace companies.

AIDC is expanding the capacity of its aero-engine business division in order to produce parts and components for aircraft engines. AIDC invested USD 20 million in setting up an aircraft engine housing plant in Taiwan in 1999. The new plant began mass production in July 2000 and has won orders from General Electric Aircraft Engine (GEAE) of the U.S., Rolls Royce Aerospace of the U.K., and Snecma of France. AIDC has also invested USD 15 million to set up another new precision forging plant in Taichung.

The state-owned Aerospace Industrial Development Corp. went public in Taipei 25 August 2014 in the biggest move in a decade by the government to privatize state enterprises. The company, which develops and manufactures military aircraft, listed on the Taiwan Stock Exchange with 53.98 percent of its shares up for sale. The shares went on sale at a premium of NT$16.84 (US$0.55). The stock sale was expected to add NT$9.34 billion to the national coffers.