Taiwan boosts anti-ship missiles to 1,800 by 2029 as China threat grows

Taiwan plans to expand its anti-ship missile arsenal to more than 1,800 units by early 2029, the island's most aggressive military buildup in decades.

Taiwan will more than double its anti-ship missile arsenal to over 1,800 by early 2029, the island's most aggressive military buildup in response to China's mounting threat of a blockade or invasion, according to a Reuters calculation.

"The scale of this procurement reflects a strategic shift toward asymmetric deterrence, prioritizing sea-denial capabilities over conventional force-on-force confrontation," a Taiwan defense official familiar with the planning said.

The buildup represents a sharp acceleration from Taiwan's previous inventory of roughly 800 anti-ship missiles as of late 2024. The new target of more than 1,800 units by early 2029 implies an average deployment rate exceeding 200 missiles per year, more than double the pace of the prior five-year period.

The escalation carries significant implications for global markets. Taiwan is home to Taiwan Semiconductor Manufacturing Co., which produces more than 90% of the world's most advanced chips. A Chinese blockade or invasion would disrupt a supply chain that generated $72 billion in semiconductor exports in 2025, according to Taiwan's Ministry of Economic Affairs. Defense contractors including Lockheed Martin Corp. and Raytheon Technologies Corp. stand to benefit from increased allied military spending, while safe-haven assets such as gold and U.S. Treasuries may see elevated demand.

The Asymmetric Deterrence Strategy

Taiwan's missile buildup is part of a broader shift toward asymmetric warfare — using relatively low-cost, high-impact weapons to deter a much larger invading force. Anti-ship missiles are designed to threaten People's Liberation Army Navy vessels attempting a crossing of the Taiwan Strait, which at its narrowest point is about 130 kilometers wide.

The last time Taiwan undertook a comparable military modernization was in the late 1990s, when it acquired 150 F-16 fighter jets from the U.S. in a deal valued at $6 billion. That procurement followed China's 1995-1996 missile tests near Taiwan's major ports, which triggered a U.S. carrier group deployment and a regional market selloff that saw the Taiwan Stock Exchange fall 12% over three months.

Market Implications Across Asset Classes

The geopolitical premium embedded in Taiwan-related assets is likely to widen. The iShares MSCI Taiwan ETF has historically declined an average of 8% in the month following major cross-strait military escalations, according to Bloomberg-compiled data. The Taiwan dollar could face depreciation pressure as foreign investors hedge against tail risk, while credit default swaps on Taiwanese sovereign debt may widen.

Conversely, defense and aerospace stocks have rallied during prior Taiwan Strait crises. The S&P Aerospace & Defense Select Industry Index gained 14% during the 2022 Pelosi visit-related tensions, as investors priced in higher regional military procurement budgets. Gold, which rose 6% during that same period, may again serve as a geopolitical hedge.

Crude oil prices could also react, given that approximately 35% of global seaborne crude transits through the South China Sea and adjacent waterways. A blockade scenario would threaten tanker routes, potentially adding a $5-to-$8 per barrel risk premium to Brent crude, based on historical conflict-related supply disruption models.

This article is for informational purposes only and does not constitute investment advice.