Summary: Taiwan is racing against time to build a homegrown drone industry that can deter or respond to a potential Chinese invasion. The ambition is bold—180,000 drones a year by 2028—but the obstacles are massive. From supply chain vulnerabilities to cost disadvantages against Chinese tech to underutilization of its own world-class semiconductor and battery sectors, Taiwan faces a high-stakes manufacturing and defense challenge. The path forward likely runs through deeper collaboration with Western allies, particularly the U.S., and a focused national strategy to translate industrial strengths into scalable defense capabilities.
Drones Are No Longer Optional in Modern Warfare—And Taiwan Knows It
Modern conflicts—from Ukraine and Nagorno-Karabakh to Sudan and Iran—have exposed how battlefield dynamics have changed. Drones aren’t future tech; they’re frontline tools. They scout, strike, jam, disable, and sometimes even win entire skirmishes. Taiwan, staring down decades of Chinese military posturing and now a potentially imminent assault, cannot afford to lag in this domain.
And yet, despite possessing world-class engineering talent, a sophisticated semiconductor industry, and experience in high-tech manufacturing, Taiwan is struggling to build a credible drone production ecosystem. Last year, fewer than 10,000 UAVs were produced—less than 6% of the country’s own target of 180,000 per year by 2028.
Three Roadblocks Holding Taiwan Back
Cathy Fang of the Research Institute for Democracy, Society, and Emerging Technology (DSET) lays out the core problem:
- High manufacturing costs
- Low domestic procurement
- Minimal foreign government orders
These aren’t technical barriers—they’re structural. Countries like Ukraine and Iran, often with fewer resources, are innovating faster because necessity forced them into wartime production mode. Taiwan, still in peacetime, hasn’t flipped that switch. Can it afford to wait?
The China Problem: Supplier and Threat
Let’s not dance around this. China is both the largest threat to Taiwan and also the world’s most dominant drone supplier. DJI owns the global market. Chinese firms also lead in key components like gimbals, optical sensors, and radio antennas.
This puts Taiwan in a bind. Ukrainian drone makers, speaking anonymously in Kyiv, admitted they still rely on Chinese parts—the Taiwanese chips they wanted were simply too expensive. That’s how China bakes long-term dependency into its adversaries’ supply chains.
Taiwan refuses to use Chinese parts. Logically, that makes sense—using tech from a country that might invade you is dangerous. But strategically, it creates cost and procurement bottlenecks that make scaling production extremely difficult. Who are Taiwan’s alternative suppliers—and are they affordable or even willing to commit?
Battery Power and Chips: Untapped Strengths
Taiwan doesn’t need to start from zero. Its battery industry is already strong—but it relies on Chinese critical minerals. Its semiconductor leaders, like TSMC, dominate global chip production—holding about 60% of the total market and 90% of high-end chips. But while Taiwan makes advanced chips for everything from smartphones to missiles, it doesn’t yet design chips optimized for drones. Why not?
Is that a failure of imagination—or of coordination? What’s stopping Taiwan from marshaling government, defense, and industry into shaping its domestic tech toward wartime applications now? And who’s responsible for closing that gap?
America’s Role: A Missing Link (So Far)
DSET believes one of the fastest ways to enhance Taiwan’s drone industry is by getting serious US government support. Taiwan hasn’t landed a single firm on the Department of Defense’s “blue list,” which identifies trusted drone tech providers for defense procurement. That “blue list” unlocks millions—or even billions—in potential orders. Why hasn’t Taiwan broken in yet?
Could it be a matter of bureaucracy? Or maybe it’s political caution on both sides? Does Washington see Taiwan as a supplier or just a frontline post?
Getting Taiwanese drones on DoD’s radar would build not just financial support but also compatibility with US and allied combat systems. That’s not just commerce—it’s deterrence.
The Strategic Roadmap Taiwan Still Needs
DSET also calls for Taiwan to get much more specific in its own planning. Right now, the focus is on small, first-person-view drones—useful, but limited. Taiwan needs a roadmap of:
- What exact capabilities it wants across air, sea, and land drones
- Which technologies it will prioritize first and why
- How it intends to scale production without Chinese components
- Who it partners with—in government and abroad
This isn’t about making everything perfect upfront. It’s about creating momentum—aligning capital, suppliers, R&D, and procurement under shared goals. As Chris Voss emphasizes, “No” is a powerful start. So, start there. What will Taiwan say “No” to in its supply chain? From that boundary, reverse-engineer the production system it needs.
A Stark Warning: Do Nothing, Get Left Behind
The language in the DSET report doesn’t mince words: Fail to act, and both Taiwan and the US risk falling behind in regional aerial and maritime warfare capability. America will lack scalable, trusted allies in drone manufacturing. Taiwan will be stuck importing expensive parts, hoping war doesn’t come before local production catches up.
That’s a strategic dead zone, not a defense plan.
From Ukraine’s Struggles to Ukraine’s Strengths
Ukraine provides the case study here. Barely three years ago, its drone industry was an afterthought. But necessity bulldozed bureaucracy. A “sense of survival,” as Fang puts it, unlocked an explosion in local manufacturing. Ukraine adapted under fire. Now it’s a drone powerhouse.
So we have to ask: what’s it going to take to spark that same urgency in Taipei?
Conclusion: Will Taiwan Choose Peacetime Complacency or Wartime Mindset?
Fang’s comment cuts deep: “We are still not at war.” That may be true—on paper. But the clock is ticking. PLA modernization targets 2027. Xi’s term ends 2029. Taiwan has 3–5 years before defense theory meets combat reality.
The advantage Taiwan holds is not just technological—it’s cultural. Its society prizes development, education, and innovation. But will it apply those values in wartime terms before it’s too late? Or will it keep waiting for someone else—someone from Washington, someone in industry, someone anywhere—to act first?
Ukraine’s drone revolution wasn’t born of luxury—it was born of desperation. How close does Taipei have to get to the edge before that same urgency kicks in?
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Featured Image courtesy of Unsplash and Winston Chen (jqwA9NQjddI)
