Taiwan grounded all military aircraft for training and exercises after a pilot was killed and another went missing on Monday when their fighter jets had a suspected mid-air collision.

The air force made the announcement after two single-seater F-5E aircraft disappeared from radar at around 3 pm (0700 GMT) some 2.6 kilometres (1.6 miles) off the coast of southern Pingtung county.

They were among four F-5Es that took off about 30 minutes earlier for a routine training mission, and the incident occurred when they were changing formation at an altitude of some 14,000 feet, chief of staff Huang Chih-wei said.

An initial probe showed a crash was the suspected cause and that "mechanical and weather factors" were not involved, he added.

One of the pilots was found unconscious in the sea but could not be resuscitated and was pronounced dead at hospital.

It was the third fatal crash in less than six months Taiwan.

"The air force has temporarily grounded for all its aircraft for (safety) reviews... we've suspended training and exercises although 'combat readiness' missions will be carried out normally," Huang said.

"The defence ministry is making every effort in the hope of rescuing the missing pilot within the golden 72 hours" of rescue time, he told reporters.

The National Rescue Command Centre said two helicopters and six coastguard ships had joined the search.

Police confirmed they found a seat with a parachute attached on a local highway.

Taiwan's ageing fighter fleet has suffered a string of fatal accidents in recent years as the island's air force is kept under constant pressure by China.

Beijing views democratic and self-ruled Taiwan as its own territory and has vowed to one day seize it, by force if necessary.

Under President Xi Jinping, China has become markedly more hostile towards Taiwan and last year, incursions by Beijing's fighter jets reached record highs.

The incursions force outgunned Taiwan to regularly scramble its jets and keep pilots trained on a round-the-clock war footing that takes its toll on ageing aircraft and those flying them.

In October, an F-5E pilot was killed when his plane crashed off the island's eastern coast.

A month later, Taiwan temporarily grounded all F-16 fighters for safety checks after one went missing during a training exercise.

The F-5E is an older generation fighter with a design that dates back to the 1960s.

There were nine incidents involving F-5E jets in the past two decades, including Monday's crash, that left ten pilots dead and three missing.

Last year, Chinese military jets made a record 380 incursions into Taiwanwaw air defence identification zone (ADIZ), with some analysts warning that tensions between the two sides were at their highest since the mid-1990s.

On Monday, Taiwan's defence ministry said it scrambled combat air patrol aircraft and broadcast warnings to leave when two Chinese J-10 fighters entered its southwest ADIZ.

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