Taiwan Becomes Russian Arms Industry’s Main Source For High Precision Machine Tools

Regardless of its pro-Ukrainian position.

Despite its publicly pro-Ukrainian position, Taiwan has become Russia’s most important supplier of high-precision metalworking machines, The Insider has discovered as part of a joint investigation carried out with Taiwanese outlet The Reporter.

Following the start of Russia’s full-scale invasion of Ukraine, German, Japanese, and Swiss machine tools manufacturers all left the Russian market, and Chinese substitutes proved to be of inferior quality. However, Taiwanese machining centers, lathes, and electrical discharge machines have since filled the gap, satisfying the needs of the Russian military-industrial complex. The Taiwanese technology has proven indispensable in the production of fuses, precision weapons, and other Russian military hardware.

Sanctions imposed by the Taiwanese government have not remedied this situation, as the machine tools themselves are shipped to Russia via third countries, including Turkey. And in some cases, critical machinery is not subject to restrictions at all.

Metal processing equipment - such as machining centers, lathes and electrical discharge machines - are an important part of Taiwan's exports. And Russia is one of its key partners. Since 2017, Russia has been one of the four largest importers of lathes from Taiwan, with an average annual sales volume of over $30 million.

After the start of Russia’s full-scale invasion of Ukraine, Taiwan, like much of the rest of the civilized world, announced sanctions against the aggressor. However, the first wave of sanctions only covered goods in the fields of semiconductors, telecommunications, and aerospace. They did not include machine tools. With its access to other markets closed off, Russia shifted its demand for high-end machine tools to Taiwan.

In January 2023, Taiwan’s Ministry of Economic Affairs finally took action, expanding the sanctions list to include the kinds of high-end machine tools Russia had legally been buying up for nearly a full year after the start of its unprovoked invasion. Following this policy switch, Taiwan's direct exports to Russia of complex machining machines and high-end lathes dropped almost to zero, leaving only loosely controlled electrical discharge machines available for purchase by Russian customers.

Transiting via Turkey

According to Russian customs records from NBD (a platform specializing in international trade data collection), between March and September 2023, Russia imported at least 193 Taiwanese-made machining centers worth a total value of nearly $29 million. Close to 80% of the Taiwanese comprehensive processing machines flowing into Russia are transshipped through third countries, with Turkey and China being the top culprits.

If we look only at data on transit through Turkey, the situation seems even more alarming: as of September 2023, almost half of the machine tools Russia imported from Turkey were produced in Taiwan.

Taiwanese customs statistics also reflect the fact that Turkey has been serving as a transit point for the island’s exported machine tools. The total value of Taiwan's machining exports to Turkey between January and October 2023 showed a 45% increase over that of the same period in 2022. This jump suddenly made Turkey the leading export market for Taiwan’s machine tools makers.