Taiwan Security Report — February 23, 2026

Security analysis based on open-source intelligence and web research. Period: February 16 — February 23, 2026.

Comprehensive Security Analysis Report for Taiwan (February 16-23, 2026)

Executive Summary

During the period of February 16-23, 2026, Taiwan's security landscape was primarily shaped by ongoing domestic legislative debates over a crucial special defense budget and evolving diplomatic and military dynamics with the United States and China. The proposed NT$1.25 trillion (US$40 billion) defense budget faced significant opposition and delays in the Legislative Yuan, raising concerns about Taiwan's defense modernization amidst intensifying threats. Concurrently, a new US-Taiwan Agreement on Reciprocal Trade was finalized, signaling strengthened economic ties, even as discussions around future US arms sales to Taiwan became intertwined with US-China diplomatic efforts. China continued its "gray-zone" coercion and significantly escalated cyberattacks on Taiwan's critical infrastructure, particularly the energy sector, underscoring persistent and multifaceted threats to the island's stability. Taiwan's foreign minister reiterated a firm stance of non-escalation but also a refusal to yield to Chinese intimidation.

Key Security Developments

• Defense Policy and Strategic Shifts
  Taiwan's Legislative Yuan faced a legislative deadlock over President Lai Ching-te's proposed NT$1.25 trillion (US$40 billion) special defense budget for 2026-2033, aimed at strengthening asymmetric capabilities and defense resilience. Opposition parties, primarily the Kuomintang (KMT) and Taiwan People's Party (TPP), have proposed significantly smaller budgets, with the TPP suggesting NT$400 billion and the KMT reportedly aiming for no more than NT$350 billion. Legislative Speaker Han Kuo-yu pledged on February 16 to prioritize the review of this budget when the new session begins after the Lunar New Year recess on February 24, following pressure from 37 US lawmakers who urged full funding. This budget is critical for Taiwan's goal of increasing defense spending to over 3% of GDP by 2026 and 5% by 2030, as stated by President Lai Ching-te.

• Diplomatic Relations with the United States
  On February 12, 2026, the United States and Taiwan finalized a new Agreement on Reciprocal Trade (ART), which aims to reduce tariffs and boost purchases of US goods, including significant commitments from Taiwan to buy US$44.4 billion of liquefied natural gas and crude oil, US$15.2 billion of civil aircraft and engines, and US$25.2 billion of power grid equipment and generators from 2025 through 2029. This agreement, which also includes Taiwanese companies investing $250 billion in the US semiconductor, AI, and energy sectors, is awaiting approval by Taiwan's parliament. Taiwan's Foreign Minister Lin Chia-lung emphasized Taiwan's crucial role in geopolitics, technology, and supply chains, which ensures Washington's continued high priority on cross-strait stability.

• Defense Acquisitions and Arms Deals
  Discussions surrounding US arms sales to Taiwan became a focal point, with US President Donald Trump stating on February 17 that his administration would decide "pretty soon" on new sales, following discussions with Chinese President Xi Jinping ahead of an April summit. A previously announced US$11.1 billion arms package from December 2025, which included HIMARS rocket systems, Javelin anti-tank missiles, and Altius loitering munitions, has faced delays and strong objections from Beijing. Reports also indicated that a new round of potential sales, possibly including Patriot missile systems, is experiencing approval delays.

• Cybersecurity Threats
  The US cybersecurity agency CISA warned on February 18, 2026, that a vulnerability (CVE-2024-7694) in the ThreatSonar Anti-Ransomware product of Taiwan-based cybersecurity firm TeamT5 has been exploited in the wild. This incident highlights the ongoing and severe cyber threat landscape. Chinese cyberattacks on Taiwan's critical infrastructure averaged 2.63 million incidents per day in 2025, a 113% increase from 2023, with the energy sector experiencing a tenfold spike compared to 2024. These attacks, often synchronized with Chinese military drills and politically sensitive moments, targeted energy, healthcare, communications, administration, and technology sectors, with prominent hacker groups including BlackTech, Flax Typhoon, Mustang Panda, APT41, and UNC3886.

• Chinese Military Coercion and "Gray-Zone" Tactics
  Taiwan's defense ministry reported that China continues its "normalized" harassment, including "joint combat-readiness patrols" around the island. These measures are designed to exert psychological coercion, wear down Taiwan's defense capacity, and demonstrate an ability to deny third-party intervention, thereby creating a severe regional security challenge. Chinese Foreign Minister Wang Yi, at the Munich Security Conference on February 15, warned against countries "trying to split Taiwan from China," a statement rebuffed by Taiwan's Foreign Minister Lin Chia-lung, who asserted Taiwan's sovereignty has never belonged to the People's Republic of China.

• Domestic Defense Industry Developments
  Taiwan is set to commence mass production of its domestically developed Tien Kung IV (Sky Bow IV) air defense missiles in 2026, with an initial order of 122 launcher pods. This system is designed to intercept cruise and ballistic missiles at altitudes up to 70 kilometers, surpassing the 60km ceiling of the US-made Patriot Advanced Capability-3 (PAC-3) systems. This development is part of Taiwan's broader strategy to enhance its asymmetric defense capabilities.

• Military Modernization and Training
  Taiwan's Cabinet released a report on February 1, 2026, detailing efforts to improve conscription training, incorporating instruction on machine guns, drones, anti-armor rockets, and Stinger missiles into the eight-week basic training program. Infantry battalions comprising one-year conscripts are planned to train with combined-arms brigades in live-fire drills to strengthen joint deterrence and strike capabilities.

• Maritime and Border Security
  China's ongoing construction of the Xiamen-Kinmen Bridge project near Xiamen and Kinmen continues to raise concerns. Beijing frames this project within cross-strait integration, but Taipei views it as a potential source of security disputes and increased social and economic penetration into Kinmen's governance environment.

Geopolitical Impact and Regional Dynamics

The recent developments in Taiwan have significant implications for regional stability and relations with major powers. The legislative impasse over Taiwan's defense budget, despite urgent calls from the US and escalating Chinese threats, signals potential vulnerabilities in Taiwan's resolve and capacity to deter aggression. This internal political friction could be perceived by Beijing as an opportunity, potentially emboldening its "gray-zone" tactics and military posturing around the island.

The finalization of the US-Taiwan Agreement on Reciprocal Trade on February 12, 2026, underscores the deepening economic and strategic alignment between Washington and Taipei, particularly in critical sectors like semiconductors and AI. This agreement, coupled with ongoing discussions about US arms sales, reinforces the US commitment to Taiwan's security and economic resilience. However, US President Trump's remarks about consulting Chinese President Xi Jinping on arms sales introduce an element of uncertainty, suggesting that Taiwan's defense acquisitions could become a bargaining chip in broader US-China diplomatic engagements. This transactional approach could complicate Taiwan's defense planning and potentially give opposition parties more leverage in budget debates.

China's "authoritarian expansionism" and intensified cyberattacks, particularly on critical infrastructure, are not only a direct threat to Taiwan but also pose significant challenges to peace and stability across the Indo-Pacific region. The synchronization of cyber operations with military drills indicates a coordinated hybrid warfare strategy aimed at disrupting and paralyzing Taiwan's functions. While recent purges within China's Central Military Commission might decrease the near-term risk of a full-scale invasion, they could lead to more aggressive and frequent invasion drills as new leadership seeks to demonstrate progress. The "Fourth Taiwan Strait Crisis" in 2026 is characterized by graduated pressure and non-kinetic coercion, testing strategic thresholds rather than immediate territorial conquest, which demands a nuanced and resilient response from Taiwan and its partners.

Military and Defense Analysis

Taiwan's military and defense posture during this period is characterized by a strong emphasis on asymmetric defense strategies and ongoing modernization efforts, yet it is hampered by political gridlock over funding. The proposed NT$1.25 trillion special defense budget, intended to bolster asymmetric capabilities, expand drone procurement, and strengthen air defense (including the "Taiwan Shield" or "T-Dome" missile defense network), remains stalled in the Legislative Yuan. This delay directly impacts the acquisition of critical capabilities and the overall pace of modernization.

Despite these challenges, Taiwan is moving forward with some indigenous defense developments. The planned mass production of the domestically developed Tien Kung IV (Sky Bow IV) air defense missiles in 2026, with an initial order of 122 launcher pods, represents a significant step in enhancing Taiwan's air defense capabilities against cruise and ballistic missiles. Furthermore, efforts are underway to improve the combat skills of conscripts, integrating training for modern weaponry such as machine guns, drones, anti-armor rockets, and Stinger missiles into basic training programs. The formation of infantry battalions comprising one-year conscripts to train with combined-arms brigades in live-fire drills aims to strengthen joint deterrence and strike capabilities.

However, the delays in US arms deliveries, including 66 F-16V fighter jets and the recently approved US$11.1 billion package, remain a concern for Taiwan's defense planners. Taiwan's defense ministry has expressed intentions to deepen collaboration with the United States, including reciprocal visits and observation of military exercises, and sharing intelligence and technology to better track Chinese military activity and prevent surprise attacks. This highlights the continued reliance on US support for critical defense assets and intelligence sharing, even as Taiwan seeks to enhance its self-sufficiency and indigenous defense capabilities.

Outlook and Forecast

Short-term trends (1-3 months): The immediate outlook for Taiwan's security will be heavily influenced by the Legislative Yuan's review of the special defense budget following the Lunar New Year recess, which began on February 24. The degree of consensus or continued deadlock between the ruling Democratic Progressive Party (DPP) and the opposition KMT and TPP will directly impact Taiwan's defense modernization timeline and its ability to acquire critical asymmetric capabilities. Concurrently, the April summit between US President Donald Trump and Chinese President Xi Jinping will be a critical event, as discussions on US arms sales to Taiwan are likely to be a key agenda item. Any outcomes from this summit could significantly alter the trajectory of US-Taiwan defense cooperation and China's response. China is likely to maintain or even increase its "gray-zone" military activities and cyberattacks, particularly targeting critical infrastructure, as a means of psychological coercion and to test Taiwan's resilience.

Critical flashpoints and risk areas: The primary flashpoint remains the legislative impasse over defense spending, as prolonged delays could undermine Taiwan's defense readiness and send a negative signal to both allies and adversaries. The potential for miscalculation stemming from intensified Chinese "gray-zone" tactics, including increased naval and air incursions or more aggressive drills, poses a constant risk of escalation in the Taiwan Strait. The Xiamen-Kinmen Bridge project also represents a localized flashpoint, as its continued development could lead to increased social and economic penetration by Beijing into Taiwan's offshore islands, potentially sparking security disputes. Furthermore, the uncertainty surrounding US arms deliveries and the potential for these sales to be leveraged in US-China diplomatic negotiations could create vulnerabilities in Taiwan's defense procurement strategy.

Indicators to monitor: Key indicators to monitor include the progress of the special defense budget through Taiwan's Legislative Yuan, specifically whether a compromise is reached or if the deadlock persists. The nature and frequency of Chinese military exercises and incursions into Taiwan's Air Defense Identification Zone (ADIZ) and surrounding waters will provide insights into Beijing's coercive strategy. Any statements or outcomes from the Trump-Xi summit regarding Taiwan and US arms sales will be crucial. Additionally, monitoring the volume and sophistication of cyberattacks against Taiwan's critical infrastructure will be essential for gauging the intensity of China's hybrid warfare efforts. Shifts in the public stance or internal dynamics of Taiwan's opposition parties regarding defense policy should also be closely watched.

Strategic recommendations: Taiwan should prioritize achieving internal consensus on defense spending to ensure the timely acquisition of critical capabilities and demonstrate national resolve. Diversifying arms acquisition sources beyond the United States, where feasible, could mitigate risks associated with potential delays or political maneuvering. Strengthening cyber defenses across all critical infrastructure sectors, including through international cooperation and intelligence sharing, is paramount given the escalating threat. Diplomatically, Taiwan should continue to highlight its democratic values and its indispensable role in global supply chains, particularly semiconductors, to reinforce international support and underscore the global implications of cross-strait instability. Finally, maintaining clear and consistent communication with key international partners, especially the United States, is vital to manage expectations and coordinate responses to evolving threats.