The last USN diesel submarine warship in service was probably the Barbel class, built in 1950s. Someone had already edited the wiki entry for Barbel class to speculate that the US might either sell plans for this sub, or build an upgraded version for ROCN:I'm surprised that this deal actually went off at all, considering all the thing that could have gone wrong. However, mainly because the US doesn't really have diesel sub building capability readily available, this might take a while to come to fruition. Perhaps the Taiwanese will obtain an upgraded version of whatever the last US diesel sub was and produce it in Taiwan.
But I'm really iffy on this 50+ year old design...
Ideally, I'd like to see TW obtain plans and tech assistance from HDW/Germany for local build/assembly. Type 212 w/tech transfer is probably impossible, so Type 209 (or even downgraded 214) is more likely. I'm not very optimistic however.
I believe TW's defense industry is perfectly capable of constructing planes, ships, subs, tanks, missiles, etc. Certain high tech components may require import (i.e. high performance aircraft engines), but they should be able to handle the integration and assembly like S. Korea. CSC has already proven itself in constructing 8 OH Perry class Frigates locally.
It may cost more to do local construction, but in the long run it's better than taking hand-me downs or beg other countries to sell to you. Buying completed weapon systems is often controversial and mired in politics, but license production plans, components, sub-assemblies, etc. are smaller ticket items individually and may have better chances of slipping through.