Amid escalating military threats from the PRC, Bloomberg reports that Taiwan faces structural challenges in developing its drone defense capabilities. The article cites commentary from the research team at the DSET.
According to Bloomberg, despite Taiwan’s homegrown technological strength—home to global electronics giants such as TSMC and Hon Hai (Foxconn)—these leading firms have made limited investments in the drone sector. As a result, Taiwan’s drone development continues to rely heavily on start-ups and small to mid-sized enterprises.
“The next war will be a drone war,” said an official at Taiwan’s National Chung-Shan Institute of Science and Technology (NCSIST), the country’s premier defense R&D agency. The report notes that Taiwan’s military currently possesses around 1,000 military-grade drones, a figure dwarfed by the tens of thousands likely held by the People’s Liberation Army (PLA).
Taiwan’s campaign to build a domestic drone force began shortly after Vladimir Putin’s February 2022 invasion of Ukraine, when then-President Tsai Ing-wen launched the “Drone National Team” initiative. The goal was to mobilize the island’s top tech talent in a massive catch-up effort. To date, more than 200 companies have joined the initiative, with some even field-testing their products on the Ukrainian battlefield.
In the interview with Bloomberg, Hong-Lun Tiunn, Deputy Director of the National Security Research Program at DSET, highlighted the strategic roles different drone platforms could play in Taiwan’s defense. “Larger UAVs could enable early warning of a PLA invasion,” he explained. “Other UAVs could conduct kamikaze missions or engage in electromagnetic warfare to disrupt radio communications as PLA vessels approach.” Tiunn further noted that smaller drones could replicate Ukrainian battlefield tactics by dropping grenades or improvised explosives on PLA forces after landing.
The report also underscores Taiwan’s dependency on foreign—especially Chinese—suppliers for critical drone components, including chipsets, camera, and sensor modules. Due to recent export restrictions imposed by Beijing, some Taiwanese firms have shifted to sourcing from countries like Israel, driving component costs up by more than tenfold. In response, the Taiwanese government has initiated a “non-red” procurement policy for military drones, starting in 2023 with a first round of contracts totaling approximately USD 212 million. A second round of procurements is reportedly underway.
Moreover, as China imposes restrictions on the export of drone components, the intensifying U.S.–China tech rivalry has inadvertently created new opportunities for Taiwan. Taiwan has begun exporting drones to countries including Poland, Germany, and the Czech Republic.
“If Taiwan’s components can expand their sales into Europe, this would drive up domestic production volume,” said DSET policy analyst Cathy Fang. “That would bring down component costs — and that’s going to boost Taiwan’s drone industry overall.”
DSET is set to publish a policy report in June on U.S.-Taiwan drone cooperation. The report is based on in-depth interviews with key stakeholders in Taiwan’s drone ecosystem and will explore concrete avenues for bilateral collaboration in drone research, development, and manufacturing.
