*

Taiwan opens once-every-two-years arms show

*

Largest ever number of U.S. companies taking part

*

Taiwan bolstering its defences as threat from China rises

By Yimou Lee and Ben Blanchard

TAIPEI, Sept 18 (Reuters) - Taiwan opened its largest

arms fair on Thursday, with about double its previous number of

exhibitors, as firms flock for a slice of the island's increased

defence spending at a time when it is looking to expand

international military cooperation.

Democratically-governed Taiwan is racing to bolster its

armed forces as China, which views the island as its own

territory, steps up military pressure by staging war games and

regularly sending warplanes and warships into nearby areas.

Taiwan, whose government rejects Beijing's territorial

claims, has set a goal of spending 5% of its GDP on defence by

2030, up from 3.3% for next year.

The Taipei Aerospace and Defence Technology Exhibition

features 490 exhibitors at 1,500 booths, up from 275 exhibitors

at about 960 booths in 2023, when it was last held.

Karin Lang, deputy director of the American Institute in

Taiwan, the de facto U.S. embassy, told the opening ceremony

that the U.S. pavilion had doubled in size since two years ago,

with more than 40 companies this time around.

"When American and Taiwan companies collaborate, they create

solutions that enhance not just bilateral interests but

contribute to broader regional security and prosperity," she

said to an audience that included Taiwan Defence Minister

Wellington Koo.

"Supply chain vulnerabilities, technological competition,

evolving security threats require us to work even more closely

with trusted partners."

The United States is Taiwan's most important arms supplier,

despite the lack of formal diplomatic ties, and Taiwan has been

keen not only to buy more but also to jointly build weapons.

On Wednesday, Taiwan unveiled its first missile jointly made

with a U.S. company, marking a major step in their fast-growing

defence cooperation.

The military-owned National Chung-Shan Institute of Science

and Technology (NCSIST) said it would also sign a series of

deals with U.S and Canadian companies for weapons such as

anti-drone rockets from Canada's AirShare and underwater

surveillance drones from U.S. firm Anduril.

"Taiwan will gain the most solid support from friendly

partners in strengthening independent defence capabilities and

improving international cooperation," the institute said in a

statement.

Other companies at the exhibition include Lockheed Martin ( LMT )

, which makes the F-16 fighter jet, the mainstay of

Taiwan's air force, and Northrop Grumman ( NOC ).

Taiwan's increased defence spending in coming years was

likely to lead to minimum procurement between $50 billion and

$60 billion, Rupert Hammond-Chambers, president of the US-Taiwan

Business Council, said before the show opened.

"About a third ... will go domestic - sub-systems of that

will go international - and then about two-thirds will go

international, most of which will go to the United States, but

not all," he said in Taipei this week.