Experts have warned the new military fleet could obscure China’s plans to invade the island or create a naval blockade. The constructions of the first eight new submarines began last month in the southern port city of Kaohsiung.
The first fleet are reportedly expected to start their sea trials in 2025.
Taiwan’s President Tsai Ing-wen called the move a “historic milestone” during a ceremony to mark the start of the submarine programme.
She added how it “demonstrates Taiwan’s strong will to the world”.
China has claimed sovereignty over the whole of Taiwan, a democracy of around 24 million people.
The two nations have been governed separately for over seven decades.
However, Beijing has claimed ownership of Taiwan under its “One China” policy which demands there is only one sovereign state under the name China.
China’s Communist Party has previously threatened to take Taiwan by force if diplomatic efforts do not succeed.
But earlier this year, President Tsai said Taiwan will defend “democracy from authoritarian aggression” in Asia.
Analysts have highlighted how diesel-electric submarines are easier and cheaper to build than nuclear powered ones.
But they also produced less noise when submerged and using the electric motors.
This could make the submarines difficult for China’s military to detect underwater, experts have suggested.
Owen Cote, associate director of the Security Studies Program at the Massachusetts Institute of Technology, told CNN: “Chinese ASW capabilities are weak and the acoustic conditions in these very shallow, noisy waters are very difficult even for advanced ASW capabilities like those deployed by Japan and the US.”
Timothy Heath, senior international defence researcher at the RAND Corp think tank, told CNN: “If Taiwan can build these submarines — and admittedly that is a big if given the island’s complete inexperience in manufacturing advanced submarines — these could be fairly advanced and effective.”
It is not clear what weapons or technology Taiwan’s new submarines will be fitted with.
But earlier this year the US gave Taiwan approval to acquire Mark 48 torpedoes which are designed to sink nuclear-powered submarines.
Carl Schuster, a former US Navy captain, told CNN: “Every (large troop carrier) hit by a torpedo, particularly a modern one like the US Mark 48, removes a battalion of troops from the invasion force.
“So, no one is going to send those amphibious assault ships into the Strait until they are confident it is clear of submarines.”
The US has been providing arms to the independent island as part of the 40-year-old Taiwan Relations Act.