GovDiscovery AI Podcast Ep. 70: Taiwan and the Pacific – Demand Signals for Industry

Host: Mike Shanley
Guest: Retired Admiral Mark Montgomery, Senior Fellow, Foundation for Defense of Democracies
Date: November 17, 2025

Episode Overview

This episode unpacks the evolving security dynamics around Taiwan, Pacific operational concepts, the implications for U.S. and allied defense industry, and lessons from the war in Ukraine. Admiral Montgomery provides a candid assessment of U.S. readiness, discusses the unique “east/west of Taiwan” warfighting geography, details cyber and infrastructure vulnerabilities, and offers strategic “so what” insights for defense industry leaders preparing for new demand signals in the Indo-Pacific.
The conversation is rich with practical recommendations, memorable analogies, and insights for anyone involved in government contracting, international security strategy, or industrial production for national defense.

Key Discussion Points & Insights

1. Operational Context: Winning in the Pacific

[00:44 – 06:11]

Dual-Faced Battle Geography:

• West of Taiwan ("hellscape"): A “counter-intervention fight,” like Ukraine—unmanned drones, mines, cruise missiles, etc., fighting against China’s amphibious assault across the Strait.
  • “That's a hellscape. There’s thousands of weapons in there… You have to build so many of so many different varieties that when Xi looks across the strait he goes, you know, that is not a fight my forces want.” (Montgomery, 03:07)
• East of Taiwan: A high-tech, sophisticated naval battle—submarines, destroyers, air-to-air warfare—with the U.S. seeking to regain air superiority.
  • “That war looks like Israel trying to take out Iran. A very different war than Ukraine, Russia.” (05:02)
• Emphasis on rapid timelines (“within five to nine days”) for U.S. forces to turn the tide.

Operational Confidence, But Rising Adversary:

• U.S. military can handle both types of warfare, but faces a “more capable adversary.”
• Dual necessity: Slow China’s cross-strait invasion and rapidly restore air power over Taiwan.

2. U.S. Readiness and Preparation

[06:11 – 08:18]

• State of Readiness: Improved munitions procurement after lessons from Ukraine. Stockpiles and funding are better, readiness improved, but “not where we want to be.”
• Allied Cooperation: Defense spending increases in Taiwan and Japan, Australia stepping up.
  • “We’re in good enough a shape that the Chinese should be deterred from doing it if they believe the U.S. will defend Taiwan.” (Montgomery, 07:54)

3. The Critical Role of Cyber in Contingency Planning

[08:18 – 14:29]

• Homeland Vulnerability: China’s ongoing “operational preparation of the battlefield” in U.S. civilian infrastructure (via campaigns like Volt Typhoon).
  • “That’s where China’s camping out, attacking our critical infrastructure… not espionage alone… That’s where they surveil our systems, find weaknesses, penetrate them…” (Montgomery, 09:01)
• Soft Targets & Public-Private Challenge: Infrastructure (ports, rail, airports) primarily owned by private companies with limited defense oversight.
  • Colorful analogy: “The people who kind of grope you at the airport are also responsible for your rail cybersecurity. Not something on my bingo card 10 years ago, but that's where we are now.” (Montgomery, 10:56)
• Solutions: Bottom-up standards, targeted funding (especially for “Uncle Rufus”-type rural operators), and focus on fixing gaps in critical infrastructure security.

4. Demand Signals for Industry & Funding

[14:29 – 21:00]

• Rapid Prototyping & Low-Cost Weaponry: New emphasis on delivering affordable munitions, rapid fielding (inspired by Ukraine’s quick tech adoption).
  • “You produce that thing off the line and they're like, we'll see you in 30 months. That, that stuff's got to stop.” (Montgomery, 15:48)
• Innovation Story: U.S. defense industry quickly responded to need for long-range, low-cost air-launched munitions for Ukraine—new primes entering market (e.g., Anduril).
• Cost Paradigms:
  • Offensive (attack) weapon costs are falling—seeker/head cost is the main barrier.
  • Defensive weapons (interceptors) still expensive; massive opportunity in finding the “low-cost defense” breakthrough.
  • “If a DIB company wants to kick butt and make money, getting that defensive interceptor down… that's killing, like, replacement for Patriot…For that I'd like something that's not 3 million a copy on the effector. I'd like something more like a hundred thousand a copy.” (Montgomery, 20:17)

5. Scenario Planning – Most Dangerous vs Most Likely

[21:00 – 24:26]

• Most Dangerous Scenario: Large-scale invasion, as previously detailed—not likely, but catastrophic if occurs.
• Most Likely Scenario: Beijing's ongoing gray-zone, cyber-enabled economic warfare; gradual escalations below the threshold of U.S. intervention.
  • Taiwan is critically vulnerable in energy—imports nearly all its grid fuel; an LNG embargo could crater power and global electronics production.
  • “The absolute critical vulnerability is a cyber-enabled economic warfare campaign against Taiwan's energy supply.” (Montgomery, 21:56)

6. China’s Long-Horizon, Increments Strategy—Lessons from Crimea

[23:57 – 26:24]

• Chinese Strategy: Incremental increases in pressure to bend Taiwan’s resolve without triggering U.S. action.
  • “The goal is to get Taiwan to bend the knee before the United States or our friends... respond…” (24:34)
• Prescriptive Measures:
  • U.S. and allies should conduct peacetime maritime convoy escorts for Taiwan’s LNG, set up joint information-sharing, and practice crisis response to preempt Chinese escalation.

7. Shipbuilding – Current Status & Strategic Proposal

[26:24 – 29:59]

• Current Woes: U.S. shipbuilding stuck at ~290 ships; half of China’s output; auxiliary/support vessels neglected.
  • “We gotta do a kind of a dramatic change… you can't treat your backlog as a reason to take dividends and buybacks.” (Montgomery, 27:21)
• Montgomery's Solution:
  • Modernize existing yards via government-industry investment.
  • Establish new U.S. yards by partnering with commercial yards and foreign (Korean, Japanese, European) companies to transfer best practices and cost efficiencies—especially for support fleets.
  • Reallocate resources from big-ticket warships to new shipyard infrastructure.

8. Lessons from Ukraine—US & Allied Forces Takeaways

[29:59 – 35:22]

• Admiral’s Work: Training and de-Sovietizing Ukraine’s MOD and improving mission command for field units.
  • “Their army is wise. They're iterating slightly faster than the Russians. They're building what they need slightly faster than the Russians.” (Montgomery, 31:28)
• Key Lessons for U.S. & Allies:
  • Need more embedded observers—$120B investment in Ukraine but few U.S./EU officers on site.
  • Iterative innovation pace (especially in EW, drones, energetics) is crucial.
  • Defense ecosystem advantage—U.S. primes + European partners still have massive industrial edge over attempts to “go it alone” nationally.

9. Ideal NATO/EU-U.S. Cooperation

[35:22 – 37:31]

• Missile Defense as Top Priority: Joint efforts in missile defense—blending U.S. radars and C2 with EU-produced low-cost interceptors, leveraging lessons from Ukraine.
  • “It's gonna be missile defense... The Russians have demonstrated that cruise ballistic and hypersonic missiles is a calling card...To me, this is a great opportunity.” (Montgomery, 35:37)
• Integrated System: Mix of active and passive sensors, terrestrial and space-based layers, and interoperable effectors.

10. Takeaways for Defense Industry: “The Monday Morning So What”

[38:08 – 39:00]

• Prime Directive: Figure out how to “drive down the cost of intercept”—innovation on defensive munitions should be the top priority for maximum strategic and market impact.
  • “The biggest so what is figuring out how to drive down the cost of intercept… you have to drive down the cost.” (Montgomery, 38:11)

Notable Quotes & Memorable Moments

• “It’s kind of an east coast, west coast thing—and not Tupac and Biggie—but...you have one kind of fight for the west coast of Taiwan...another sort of fight east of Taiwan.” (Montgomery, 00:55)
• “If this was a thousand knapsacks with Semtex...we'd just about lost our mind. But back on this [cyber], somehow we shrug it off.” (Montgomery, 09:29)
• “Our yards kick ass in quality, but the quantity’s not there.” (Montgomery, 28:55)
• “If a hyper…short range ballistic missile’s fired at me, I want Patriot. But I don’t need it for drones…I’d like something more like $100,000 a copy at most.” (Montgomery, 20:55)
• “[Ukraine]--they’re iterating slightly faster than the Russians...not losing is a victory.” (Montgomery, 31:28)

Timestamps for Important Segments

• 00:44 — Operational concept: “east coast, west coast” scenario for Taiwan defense
• 06:38 — U.S., allied readiness and military procurement post-Ukraine
• 08:25 — Critical U.S. infrastructure cyber vulnerabilities and “Volt Typhoon”
• 14:29 — Industry demand: rapid prototyping, low-cost production, and what needs to change
• 21:15 — Most likely vs. most dangerous scenarios for Taiwan
• 24:26 — Chinese “Crimea-style” incremental escalation explained
• 26:42 — U.S. shipbuilding bottleneck & proposed yard modernization/partnership
• 29:59 — Ukraine military assistance, training, and lessons for U.S. Armed Forces
• 35:36 — Ideal U.S.-European missile defense cooperation
• 38:08 — Monday morning “so what”: Focus on low-cost defensive munitions

Follow & Connect

• Foundation for Defense of Democracies: fdd.org
• Twitter: @marksCMOTGO

[End of summary. For more insights, visit govdiscoveryai.com or connect with Mike Shanley and GovDiscovery AI.]