China's Suspension of Receiving Boeing Aircraft Has Limited Impact: Taiwan's Aerospace Supply Chain is Viewed Favorably

Taiwan • Business • 04/16 03:20
China's Suspension of Receiving Boeing Aircraft Has Limited Impact: Taiwan's Aerospace Supply Chain is Viewed Favorably

In April 2025, the Chinese government ordered domestic airlines to suspend receiving Boeing aircraft and stop purchasing aircraft parts from American companies as a countermeasure against the 145% tariff imposed by the United States. Since the Chinese market accounts for only 2.06% of Boeing's orders, the impact is limited. Taiwanese aerospace supply chain companies such as Evergreen Aviation, Asia Pacific Aerospace, and Fengda Technology are gaining favor due to the recovery in global demand, as their stock prices rise, indicating market confidence in their growth potential.

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04/16 03:20

China's Suspension of Receiving Boeing Aircraft Has Limited Impact: Taiwan's Aerospace Supply Chain is Viewed Favorably

In April 2025, the Chinese government ordered domestic airlines to suspend receiving Boeing aircraft and stop purchasing aircraft parts from American companies as a countermeasure against the 145% tariff imposed by the United States. Since the Chinese market accounts for only 2.06% of Boeing's orders, the impact is limited. Taiwanese aerospace supply chain companies such as Evergreen Aviation, Asia Pacific Aerospace, and Fengda Technology are gaining favor due to the recovery in global demand, as their stock prices rise, indicating market confidence in their growth potential.

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Current Status of Boeing Orders in the Chinese Market

According to Boeing's official data as of the end of March 2025, Boeing's total backlog of orders is 6,319 aircraft, with only 130 orders from Chinese airlines and leasing companies, which accounts for about 2.06%. This proportion is significantly lower than in past peak periods. In 2018, the Chinese market accounted for 25% of Boeing's deliveries, but since the US-China trade war broke out that year, China has gradually reduced its procurement from Boeing. Since 2020, China has only purchased 28 Boeing aircraft.

Currently, about 10 Boeing 737 MAX aircraft are affected, originally scheduled for delivery to China Southern Airlines, Air China, and Xiamen Airlines, with each having 2 aircraft awaiting delivery. Some aircraft are parked at Boeing's Seattle factory in the US, while others have been transported to the delivery center in Zhoushan, China. Due to China's implementation of a 125% retaliatory tariff on April 12, the delivery of these aircraft will be handled on a case-by-case basis, depending on payment and customs clearance times.

Institutional Views: Limited Impact on Boeing

Several institutional entities have pointed out that although the Chinese market is strategically significant for Boeing, the actual order volume has significantly shrunk. BofA Securities noted that Boeing is one of the largest exporters from the US, and while China's move is symbolic, its substantial impact is limited. Bloomberg analysts George Ferguson and Melissa Balzano also stated that Chinese orders account for only a small portion of Boeing's backlog, and if Boeing can resell these aircraft to other markets (such as India), its inventory pressure is expected to ease.

Additionally, institutions noted that Boeing's current delivery rate is stable, with monthly deliveries in the first quarter of 2025 maintaining between 44 and 45 aircraft, and the overall supply and demand have not been significantly impacted by the Chinese ban.

Attention on Taiwan's Aerospace Supply Chain

Against the backdrop of China's suspension of Boeing deliveries, Taiwan's aerospace supply chain companies have instead gained market favor. Institutional entities pointed out that Evergreen Aviation Technologies Corp. (2645) has capabilities in aircraft maintenance, component manufacturing, and system integration, and collaborates with several international aerospace giants, benefiting from the global aerospace manufacturing recovery trend. Since the beginning of 2025, Evergreen Aviation Technologies' stock performance has been strong, with institutions predicting continued growth in its annual operations.

Also favored by institutions are Asia Pacific Airlines (2630) and Fong Da Technology (3004). Asia Pacific Airlines focuses on aircraft maintenance and modification and continues to expand its overseas market; Fong Da Technology is a supplier of precision aerospace components, covering aircraft structural parts and engine components, with customers including Boeing and Airbus.

According to a report by the Commercial Times, on April 16, 2025, the stock prices of Taiwan's aerospace supply chain rose across the board, with Pao Yi (8222) and Sheng Tian (4541) hitting the daily limit, and Evergreen Aviation Technologies, Hanxiang (2634), and Zhulong (4572) rising by 7% to 8%. Institutions pointed out that this reflects market confidence in Taiwan's aerospace industry, especially under the global supply chain restructuring and order transfer effects, where Taiwanese companies have the capacity to take over.

Boeing Supply Chain and Maintenance Demand Remain

Despite China's suspension of new aircraft deliveries, there are still hundreds of Boeing aircraft in service in the existing fleets of Chinese airlines, which require regular maintenance and parts replacement. Institutions noted that this will maintain the basic demand for Boeing and its supply chain. According to Cirium data, Boeing delivered 18 aircraft to China in the first quarter of 2025, indicating that cooperation between the two parties has not been completely interrupted.

Moreover, Boeing's market share in China has dropped from 40% in 2018 to the current 16%, but its long-term forecast still believes that the Chinese market will account for 20% of global aircraft deliveries over the next 20 years. Therefore, despite short-term delivery obstacles, Boeing still regards China as one of its key markets.

Supply Chain Restructuring and Order Transfer Effects

With rising US-China trade tensions, Chinese airlines may turn to European Airbus and China's COMAC for new aircraft procurement. A report by JPMorgan pointed out that by the end of 2023, 47% of Air China and China Southern Airlines' fleets were Boeing models, while China Eastern Airlines was 39%. The three major airlines originally planned to receive a total of 179 Boeing aircraft between 2025 and 2027, and if orders are transferred to Airbus or COMAC, it could lead to a redistribution effect on the global supply chain.

However, institutions also noted that COMAC's C919 program still heavily relies on US suppliers, and if China completely stops procuring US parts, the program may also be hindered.

References

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