As far as I know the Netherlands produced the two current Hai Lung class boats used by Taiwan since the mid-80ties. There are 2 more boats of the US-guppy class (anno domini 1945) but they do not count anymore. All this equipment is hopelessly outdated. Taiwan needs around 8 subs to answer the red Chinese threat.
In May 2002 Taiwan's legislature passed a resolution requiring that at least six of the proposed eight subs must be built in Taiwan with US help. In late June 2002 the cost of the eight submarines was reported as being as much as US$6 billion, making them the most expensive weapons system Taiwan has ever bought from the United States.
The Taiwanese dismissed a American proposal to buy submarines being buildt in Israel. They wanted German technology and nothing else and counted on US-pressure on the German government. This attempt did not work. In May 2004, Jane's Defence Weekly indicated that Northrop Grumman Ship Systems is offering Taiwan a modernized version of the old US Barbel - class submarine. NGSS would like to partner with Howaldtswerke- Deutsche Werft (HDW). The design of the submarine would use the Barbel's hullform fitted with an HDW pressure hull and modern components such as AIP. The submarine would have a submerged displacement of about 2,644 tons, a maximum speed of 21 knots, a range without refuelling of about 19,000nm and six torpedo or missile launch tubes. The likelihood of the deal is extremly uncertain as elements in Northrop Grumman appears to be cool to the idea, and it is unclear if the German government would approve HDW's transfer.
Personally I do not believe that Schröder is moving one inch in this case. Hehe! The US probably have to break a taboo and will sell Los Angeles cass nuke subs to Taiwan. This subject will remain exciting in the future.
Israel has never built subs & has no plans for it either.All of their subs are of German build.I think the plan you are referring to was a proposal that Taiwan would buy a modified variant of Israel's current Dolphin class Type-209 boat,which would be built in the US with Germany's permission.The German component in such a venture would be very limited,but I don't think the Germans & later the Israelis would have shown much interest.Germany wouldn't want to jeopardise the huge civilian & military market in China,while Israel wouldn't want to lose it's source of subs,esp when they are planning to buy atleast 2 more new Type-212 class boats.