On April 2, Dr. Chih-Cheng Chang, CEO of DSET, led a delegation to the American Enterprise Institute (AEI) in Washington, D.C. to engage with AEI’s research teams on technology security and Asia policy. This visit followed the late-March visit to DSET by Daniel Blumenthal, Senior Fellow at AEI, marking a continued exchange between the two institutions.
During the meeting, both sides held in-depth discussions on key challenges facing Taiwan’s drone industry, including bottlenecks in the supply chain, strategies for de-red critical components, risks within the semiconductor supply chain, and opportunities for cooperation in the Indo-Pacific market.
Dr. Chang highlighted Taiwan’s three-phase defense strategy for drone operations, which includes long-range precision strikes prior to a cross-strait landing, interdiction at the median line, and combat on the beachhead. However, he noted that the implementation of this strategy is hindered by structural shortages in key components such as chips and battery materials—issues that are detailed in DSET’s upcoming drone industry report.
“Taiwan possesses the capability to design critical chips for drones, but still lacks the scale and market incentives needed for mass production targeting the domestic defense sector,” Dr. Chang stated. “This is precisely why we are actively promoting U.S.-Taiwan cooperation in building a ‘non-PRC supply chain.’”
The two sides also explored strategies to expand Taiwan’s drone industry into emerging markets in Southeast Asia and Eastern Europe. They agreed on the importance of viewing regional allies as partners rather than competitors, and emphasized the need to build a resilient, risk-mitigated multinational ecosystem. AEI experts pointed out that despite vast opportunities in the Indo-Pacific region, it is essential for Taiwanese drone companies to deepen their understanding of U.S. export control regulations to address market uncertainties. “The U.S. is seeking trusted supply partners. Taiwanese firms establishing operations in the U.S. and complying with relevant regulations will become far more attractive for future collaboration,” one AEI expert noted.
Beyond the drone sector, the two sides exchanged views on the competitive dynamics of the semiconductor industry. The DSET team shared its newly released report on mature node chips and emphasized that although Taiwan and South Korea compete in logic and memory chip markets, they are in fact technology allies facing shared risks posed by Chinese interference and geopolitical tensions. Dr. Chang stressed that a key focus of future research will be evaluating whether semiconductor supply chains can continue to operate under potential wartime scenarios, such as a Taiwan Strait blockade.