Chile has for many years produced its own small arms, ammunition, and explosives, but it did not have a real defense industry until the 1970s. The almost universal boycott after the armed forces overthrew the Allende administration in 1973, and in particular the 1974 Kennedy Amendment, which deprived Chile of maintenance support for its large inventory of United Statesmanufactured defense equipment, threw the Chileans back on their own resources. At the time, war with Argentina over the Beagle Channel seemed likely, and local industrial potential was expanding dramatically. Thus, Chile became a major producer of defense equipment, the third largest in Latin America after Brazil and Argentina. In addition to small arms and ammunition, Chile manufactured infantry-support weapons, both armored and softskinned vehicles, artillery pieces, ballistic rocket systems, antiaircraft artillery weapons, naval vessels, military aircraft, aerial bombs and rockets, and radar and electronic warfare equipment. Nevertheless, according to defense analyst Daniel Prieto Vial, by 1991 Chile supplied no more than 3 percent of its own defense needs and purchased the remaining 97 percent elsewhere.

As Chile became a successful exporter, the biennial International Air and Space Fair (Feria Internacional del Aire y del Espacio--FIDAE) became its principal marketing event. First held in March 1980 as a modest flying display and exhibition of air defense products to celebrate the fiftieth anniversary of the FACh's formation, what was then called the International Air Fair (Feria Internacional del Aire--FIDA) was an unexpected success. It was decided to repeat what was originally conceived of as a onetime event every second year. In 1990 the name was changed to FIDAE to reflect the aerospace dimension. FIDAE continued to grow steadily both in size and in international importance and by 1992 was the major forum for the display of military equipment in the Southern Hemisphere, attracting more than 300 exhibitors from twenty-seven countries to Los Cerrillos Air Base. These included not only other arms-producing nations in the developing world but also the major manufacturers of defense equipment in the leading industrialized nations.

Data as of March 1994