2026-10-27
The global Contract Development and Manufacturing Organization (CDMO) industry is at a pivotal transition, moving from simple, capacity-based contract manufacturing to deep strategic partnerships. Three major shifts are driving this transformation: leading global CDMOs divesting their non-CDMO businesses to transform into pure-play CDMOs; site selection strategies shifting from production-cost orientation to assessments of geopolitical and policy risks; and outsourcing scope extending from standard dosage forms into technically demanding areas such as antibody-drug conjugates (ADCs) and cell therapy.
The rise in demand for medicines driven by an aging population, along with soaring construction costs and the complexity of next-generation biologics, has significantly increased pharmaceutical companies’ reliance on outsourcing. According to a Fortune Business Insights report, the global CDMO market is projected to grow from US$214.95 billion in 2026 to US$419.93 billion in 2034, a compound annual growth rate (CAGR) of 8.7%. The short-term focus is on supply chain reallocation driven by the U.S. "BIOSECURE Act," pharmaceutical tariffs, and industry restructuring. This will drive the relocation of advanced manufacturing processes and deeper integration with trusted supply chains, reshaping the global biopharmaceutical manufacturing landscape over the long term.
Leading global CDMOs are concentrating their resources on their core contract manufacturing businesses, thereby eliminating conflicts of interest with their clients. Swiss company Lonza reorganized its CDMO business into three platforms, Integrated Biologics, Advanced Synthesis, and Specialized Modalities, starting in April 2025. In March 2026, Lonza also announced the sale of a majority stake in its Capsules & Health Ingredients business to U.S.-based Lone Star Funds in a transaction valued at about US$3 billion, advancing its shift toward a pure-play CDMO model. South Korea's Samsung Biologics completed a spin-off in November 2025, separating Samsung Bioepis, its biosimilar development business. Because biosimilars—highly similar products developed after originator biologics' patents expire—can compete with clients' medicines, the spin-off lets Samsung focus more fully on expanding its pure-play CDMO business. With resources concentrated, the major players' investment priorities have shifted toward technically demanding areas. In June 2026, Lonza announced it will expand capacity for highly potent active pharmaceutical ingredients (HPAPIs) and payload-linkers at its Visp site, with operations expected to begin in 2028 to meet ADC manufacturing demand.
U.S. policy has changed the logic of capacity siting. Congress enacted the BIOSECURE Act in December 2025 as part of the FY2026 National Defense Authorization Act (NDAA), prohibiting federal agencies from procuring equipment and services from "biotechnology companies of concern." Immediately afterward, in April 2026, the United States announced tariffs of up to 100% on imported patented drugs under Section 232, to take effect in phases from the end of July; companies with manufacturing facilities in the U.S. may qualify for lower tariff rates, while specialty pharmaceuticals such as ADCs and cell and gene therapies are classified in the zero-tariff category.
Pharmaceutical process transfer requires process validation, product comparability assessment, and regulatory change submissions, often taking several years to complete. Acquiring existing, inspection-approved facilities is a common route to shortening this timeline. As a result, geopolitical risks and tariff barriers have prompted major companies to pursue acquisitions to establish a foothold in U.S. domestic manufacturing as quickly as possible. In 2024, Lonza acquired Genentech's biologics site in Vacaville, California, from Roche for US$1.2 billion. Samsung Biologics completed its March 2026 acquisition of UK-based GlaxoSmithKline's (GSK) Rockville, Maryland site, adding 60,000 liters of API capacity and securing its first U.S. manufacturing location. Taiwanese companies have pursued outward expansion on the same logic: Bora Pharmaceuticals acquired the CDMO business of U.S.-based MacroGenics for US$122.5 million, completing the transaction in July 2026 and gaining a large-molecule production facility also located in Rockville.
Amid the friend-shoring trend, leading global CDMOs such as Lonza and Samsung Biologics have focused capacity expansion in the United States, Europe, and South Korea, with none establishing production sites in Taiwan. Foreign capital and international technologies mainly enter Taiwan through equity participation, technology licensing, and contract manufacturing, with the most tangible progress seen in cell and gene therapy. Taiwan Bio-Manufacturing Corporation (TBMC), whose largest shareholder is U.S.-based National Resilience, has obtained manufacturing technology licenses covering National Resilience's five major therapeutic areas. TBMC's Zhubei GMP facility, launched in March 2026, is Taiwan's first GMP plant to produce mRNA vaccines at commercial scale and is already in discussions with U.S. and Japanese cell therapy clients about contract manufacturing.
Locus Cell was jointly established with funding from Taiwan-based MetaTech (AP) Inc. (Sanko), the National Development Fund, and Japan's Hitachi Group., among others. Locus Cell launched its Zhubei smart cell factory in April 2026. At the opening ceremony, Locus Cell signed a cooperation agreement with Germany's Miltenyi Biotec to introduce its cell and gene therapy platform and entered a three-way collaboration with Australia's Cambium Bio and Zheng Yang Biomedical to advance commercial-scale manufacturing of a cell therapy for dry eye disease. This therapy has already received Fast Track designation from the U.S. Food and Drug Administration (FDA) and is preparing to enter Phase III clinical trials.
Mycenax Biotech specializes in drug-substance manufacturing and sterile fill-finish, has passed inspections by six regulatory authorities, including those in the European Union and Japan, and supplies products to 13 markets. In July 2026, Mycenax deepened its cooperation with U.S. life sciences equipment company Cytiva, introducing its AI chromatography process simulation platform. Mycenax also jointly established Alfenax Biologics with three Japanese companies, including pharmaceutical distributor Alfresa, and invested more than NT$3 billion to build a biologics plant in Japan, scheduled to begin production in 2030.
Bora Pharmaceuticals renewed a five-year global manufacturing contract with GSK in February 2026 worth US$250 million, centered on its Mississauga, Canada facility and extending to manufacturing sites in Minnesota, U.S.A., and Zhongli, Taiwan. In November 2025, EirGenix signed an exclusive worldwide licensing agreement with Switzerland-based Sandoz for its HER2 biosimilar EG1206A (pertuzumab), with signing and milestone payments totaling US$152 million. EirGenix launched its Zhubei microbial plant No. 2 in September 2026 and signed an agreement with U.S.-based GeneFab to manufacture GMP-compliant plasmid DNA as raw material for the partner's production of lentiviral vectors used in gene therapy, extending EirGenix's CDMO services from biologics to cell and gene therapy. , In April 2026, it took over the drug product fill-finish for EirGenix's first biosimilar EG12014 (trastuzumab); in the same month, it allied with Japan's Jiksak Bioengineering, under which the Japanese partner provides neuron-selective drug delivery technology, while Formosa Laboratories, Inc. also serving as the CDMO partner responsible for the development and manufacturing of ADCs for neurological diseases.
Taiwan has progressively implemented its CDMO incentives and regulatory framework. Act for the Development of Biotech and Pharmaceutical Industry. Spearheaded by the Ministry of Economic Affairs, took effect in 2022 and includes CDMOs within its incentive scope—companies purchasing production equipment may apply for investment tax credits—with implementation running through the end of 2031. The Regenerative Medicine Act and the Regenerative Medicinal Products Act came into effect on January 1, 2026. For regenerative medicine products targeting life-threatening or severely disabling diseases, companies may apply for a conditional marketing authorization of up to five years after completing Phase II clinical trials with confirmed safety and preliminary efficacy, without waiting for Phase III completion—also helping companies plan manufacturing needs earlier.
The Executive Yuan also approved the four-year (2026–2029) National Drug Resilience Preparedness Program, with a total budget of NT$24 billion, officially announced in March 2026. Built on the pillars of "domestic production for domestic use, intelligent regulation, and international alliances," the program promotes the domestic production of at least 50 critical drugs, driving API localization and biologics self-sufficiency, and plans to establish a national-level Pharmaceutical Intelligence Logistics and Stockpile Center (PILLS Center), creating domestic production demand for local manufacturers.
As the global CDMO industry shifts toward long-term manufacturing partnerships and seeks to diversify geopolitical risk, Taiwan, leveraging its manufacturing capabilities in APIs, biologics, and cell therapy, is gradually moving beyond a pure contract-manufacturing framework and becoming a manufacturing and technology partner in international pharmaceutical companies' de-risking strategies. First-tier international CDMO majors have not yet established production sites in Taiwan; the next stage will be to build on existing cooperation through equity participation, licensing, and contract manufacturing to attract further investment and expand Taiwan's manufacturing footprint. In the future, Taiwan's CDMO companies will need to accumulate commercial-scale manufacturing track records in technically demanding areas such as ADCs and cell and gene therapy. They must also deepen joint development, process transfer, and long-term manufacturing partnerships with international pharmaceutical companies, while using production sites in the United States, Canada, and other markets to expand cross-border manufacturing services. In parallel, national policies can support further growth in local production of critical drugs and contract manufacturing of regenerative medicinal products. Through these efforts, Taiwan can accelerate its integration with international manufacturing systems amid the restructuring of the global biopharmaceutical supply chain.
Source： Industrial Technology Research Institute (ITRI) Industry Service Center Research Team
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