The Research Institute for Democracy, Society, and Emerging Technology (DSET) hosted the 2025 International Summit on Supply Chain Resilience, where the “Drone Supply Chain Resilience Dialogue” stood out as one of the summit’s core sessions. Moderated by Professor Dung-Sheng Chen, DSET Convener, the dialogue featured W. Mark Valentine, Global Head of National Security Strategy at Skydio; Min-Huang Tsai, Director of the Military Business Division at AIDC; Yurii Poita, Head of the Asia-Pacific Section at the Center for Army Conversion and Disarmament Studies (CACDS); Peter Mattis, President of The Jamestown Foundation; and Cathy Fang, Policy Analyst from DSET’s National Security and Economic Security Divisions. The speakers engaged in a deep exchange on the strategic application of drones, supply chain resilience, industrial policy, and international cooperation among democratic nations.
Session Highlights
Professor Chen opened the session by stressing the urgency of enhancing drone logistics and manufacturing capabilities in the face of escalating geopolitical tensions and rapid technological change. “The resilience of our drone supply chain is no longer optional—it is strategic,” he remarked.
Cathy Fang presented DSET’s forthcoming report, Drones for Democracy: U.S.–Taiwan Cooperation in Building a Resilient and China-Free UAV Supply Chain, which assesses Taiwan’s current drone industry landscape and its cooperation with the United States. The report proposes a policy roadmap for strengthening Taiwan’s autonomous drone supply chain through expanded domestic production and deeper bilateral collaboration. Fang highlighted that under the Lai Ching-te administration, Taiwan has defined three strategic objectives and five implementation strategies to drive drone industry development. Major government procurement plans include 980 U.S.-made drones, 700 units developed by NCSIST, a four-year commercial-grade military acquisition of 3,422 drones, and a newly announced three-year procurement plan for 47,000 drones. On the export front, Taiwan’s drone exports rose from approximately 300 units in 2023 to 3,400 in Q1 2025, with increasing demand in Europe—especially Poland, Germany, and the Czech Republic.
Despite this progress, Fang noted that Taiwan still faces structural constraints. Current annual production capacity stands at only 8,000 to 10,000 units—well below the government’s 2028 target of 180,000. Key challenges include the high cost of “China-free” drones, limited economies of scale, export controls on critical technologies, dependency on Chinese raw materials, and technological bottlenecks in core subsystems. Moreover, Taiwan remains excluded from the U.S. Blue UAS and Green UAS lists and has not attained formal strategic partner status, limiting access to U.S. commercial and defense drone markets. The report recommends expanding market access, establishing co-production mechanisms, and deepening platform-level cooperation to position Taiwan as a resilient and trusted partner in the global drone ecosystem.
Mark Valentine underscored that the strategic value of drones lies not in hardware alone but in their ability to “move, sense, and affect.” Drones have evolved from toys to tools and are now becoming essential infrastructure. This shift demands a focus on mission performance and system resilience, with supply chain security playing a central role. He described an ongoing operational transition from “one-to-one” (one operator per drone) to “one-to-many” systems, where a single operator can command multiple drones. Skydio is developing remotely deployable drones with autonomous activation capabilities, supported by intelligent drone docks.
Valentine emphasized that drones must be treated as components within a broader system that integrates digital infrastructure, AI, and operational command—rather than as standalone platforms. He warned that Taiwan’s current procurement levels in the hundreds or low thousands fall far short of what is needed to deter China. Democratic countries must scale up production and deployment by two orders of magnitude while adapting doctrines, command architectures, and investment strategies to enable autonomous, distributed systems.
Representing the Taiwan Drone International Business Opportunity Alliance (TEDIBOA), Min-Huang Tsai of AIDC introduced the alliance’s efforts to drive the growth of Taiwan’s drone sector. Established by the Ministry of Economic Affairs in September 2023, TEDIBOA comprises over 240 member firms categorized into three tiers: Tier 1 platform providers, Tier 2 module suppliers, and Tier 3 component and software manufacturers. The alliance supports government-to-government alignment and fosters international B2B opportunities. It plays a central role in executing Taiwan’s “three objectives and five strategies” drone policy.
Tsai outlined the alliance’s current priorities, including collaboration with AUVSI in the U.S. to obtain Blue UAS and Green UAS certifications; addressing technology gaps in cybersecurity, flight control systems, infrared sensors, and SoC integration; and applying wartime lessons from Ukraine to develop GNSS-independent, autonomous, edge-AI-enabled drones. However, he noted that bottlenecks remain in sourcing rare earth magnetic materials and battery cathode components. He called for greater investment from Taiwan’s semiconductor sector to co-create an innovative drone ecosystem.
Yurii Poita of CACDS provided a comprehensive overview of Ukraine’s evolving use of drones in air, land, and maritime warfare over the past three years. Drones, he said, have reshaped military doctrine, logistics, and force structure. From 2022–2023, drones were primarily used for ISR and artillery correction, improving accuracy and reducing ammunition usage. By 2024, drones accounted for nearly 80% of battlefield damage, gradually displacing traditional artillery. Advanced drones with AI, machine vision, and anti-jamming capabilities have created “death zones” up to 20 km wide along the frontlines. Ukraine has established dedicated drone brigades and platoons and has emphasized mass production of modular, low-cost drones. Faced with daily waves of Shahed drone attacks from Russia, Ukraine’s air defense systems are under immense pressure.
At sea, Ukraine has used unmanned surface vehicles (USVs) to destroy dozens of Russian naval vessels and force a Russian retreat from the western Black Sea. Future efforts will focus on expanding drone capabilities, enabling cross-domain drone swarms, and integrating AI to allow a single operator to control fleets with diverse mission profiles.
Peter Mattis of The Jamestown Foundation highlighted the PLA’s rapid absorption of lessons from the war in Ukraine, particularly in the areas of informatization and intelligentization. He warned that the PLA is integrating drones into its core doctrine to accelerate AI-driven kill chains. Citing China’s Jiutian drone mothership and its plan to procure 2 million drones, Mattis emphasized that the PRC is preparing for long-term conflict and mass production. He urged democracies to move beyond small-scale procurement and develop scalable operational concepts and force structures—without which legislatures will be reluctant to fund necessary investments. He suggested that reforms akin to those in Ukraine and Russia should be considered by the U.S., Japan, South Korea, and Taiwan.
Mattis also warned that Chinese firms like DJI distort global markets and suppress local R&D through unfair competition. He argued for excluding such firms from allied markets to support a resilient dual-use ecosystem. While early action may be costly, he stressed that the price of delayed wartime adaptation would be far higher.
Q&A Session
During the discussion, panelists stressed that drone supply chain resilience goes beyond technical solutions—it depends on sound policy, battlefield integration, and training. Yurii Poita identified three key lessons Taiwan can draw from Ukraine: rapidly scaling production capacity, integrating drones into armed forces, and training sufficient personnel capable of operating tactical and maritime drones.
The session concluded with a clear message: Taiwan has the foundational capabilities to lead in drone innovation, but time is of the essence. Without decisive policy action, deeper strategic partnerships, and accelerated industrial scaling, Taiwan risks falling behind in a domain critical to future conflicts.
