1. Policy Framework 

To strengthen industrial competitiveness under the Five Trusted Industry Sectors initiative, the Executive Yuan approved the “Five Trusted Industry Sectors Promotion Plan” in September 2024. The policy builds on Taiwan’s established strengths in semiconductors and ICT, while promoting the integration of AI and cybersecurity technologies to position Taiwan as an indispensable partner within the global democratic technology alliance. The government has outlined ambitious development targets:

●    2028 Industry Output Targets: NT$30 billion for the security and surveillance sector and NT$100 billion for cybersecurity
●    Vision: To become a globally trusted leader in security and surveillance and cybersecurity 
●    Key Strategies: Advancing AIoT-enabled smart surveillance, supporting companies in obtaining international certifications (e.g., CMMC, NDAA, GDPR), and embedding cybersecurity resilience across core industries such as semiconductors and defense

2. Expanding Scope and Classification of the Security & Surveillance Sector

Under the Five Trusted Industry Sectors framework, the scope of security and surveillance has expanded from physical protection to include the digital domain. It can be broadly categorized into three major subsectors:
 

3. Early-Stage Investment Market Analysis (2015-Q1 2025)

According to data compiled by the FINDIT Research Team, Taiwan’s security and surveillance sector has demonstrated strong momentum in early-stage investment over the past decade.

3.1 Investment Overview and Peak Activity

• Overall Performance: From 2015 to Q1 2025, the sector recorded 156 investment deals, with total disclosed funding of approximately US$520 million.

• Turning Point: Investment value peaked at US$145 million in 2022, driven by several large-scale deals, including TXOne Networks.

• Market Activity: Deal count reached a record high of 28 in 2023, indicating strong activity from newly funded startups.

3.2 Shifts Across Subsectors

Research indicates that market focus has shifted from traditional security and disaster prevention toward information and data security.

• Information and Data Security: This subsector has led in deal count since 2018, reaching a record 24 deals in 2023.

• IoT and OT Security: While accounting for fewer deals, this subsector records the highest average investment size. In 2022 and 2024, it captured a significant share of total funding, indicating that investors are willing to commit substantial capital to industrial cybersecurity companies with high technical complexity.

3.3 Increasing Deal Sizes Over Time

Investment scale has exhibited a steady upward trend over time:

• Average Deal Size: Increased from around the US$1 million level prior to 2017 to US$4 million by Q1 2025

• Median Deal Size: Rose from below US$1 million to US$2.9 million, suggesting improved capital availability and growing investor confidence

4. Notable Startups and Investor Landscape

4.1 Top Funded Startups 

Since 2024, several startups specializing in AI and zero trust technologies have stood out:

• TXOne Networks: Focuses on zero trust architecture for OT. Completed a US$51 million Series B+ round in May 2024, with solutions widely adopted across semiconductor manufacturing and critical infrastructure

• TPIsoftware: Provides AI-driven anomaly detection and zero trust verification solutions; listed on Taiwan’s Emerging Stock Board in late 2024

• Jmem Technology: Develops post-quantum cryptographic (PQC) chips and has entered the military drone market, with cumulative funding exceeding US$6 million

• CyCraft: Offers AI-powered automated cybersecurity solutions and completed a NT$136 million capital increase in May 2025

4.2 Investor Structure

• C/CVC: Account for the largest share of deals (66.7%), indicating that established enterprises are actively investing in security and surveillance startups as part of their strategic positioning 

• Foreign Investors: Represent only 14.1% of deal count but record the highest average investment size at US$10.01 million, suggesting a preference for larger, high-potential deals

• National Development Fund (NDF): Plays a key role in supporting early-stage innovation, accounting for 5.1% of deals, with investments concentrated in small- and mid-sized rounds

5. Conclusion: From Hardware Manufacturers to Solution Providers

The future of Taiwan’s security and surveillance sector lies not only in manufacturing, but in trust. As AI-powered image analytics, cloud storage, and IoT technologies continue to converge, traditional surveillance equipment is evolving into intelligent decision-making systems. By leveraging its strong hardware supply chain while further advancing OT/IT integration, international compliance (e.g., NDAA), and AI software capabilities, Taiwan is poised to establish an irreplaceable role as a trusted partner within the global trend of intelligent transformation.