A recent report by The Economist notes that Taiwan is actively developing a “non-red” drone industry—drones free of Chinese components—and is gradually positioning itself as an important partner in the drone supply chains of democratic countries. The article analyzes Taiwan’s drone export strategy and includes interviews with DSET Policy Analyst Samara Duerr and Cathy Fang, as well as Non-Resident Fellow Ting-Wei Lin, while also citing findings from a policy report by DSET’s National Security Program.
The report notes that Russia’s war in Ukraine has underscored the importance of drones in modern warfare. With China currently accounting for roughly 70–80% of global drone production, many countries are increasingly seeking alternative suppliers that do not rely on Chinese components. Taiwan has therefore promoted the development of a “non-red” drone industry in an effort to strengthen defense self-reliance while expanding its presence in international markets.
According to the report, Taiwan’s drone production has grown rapidly in recent years. Output in 2025 increased to more than twelve times the level recorded in 2024, while exports surged more than thirty-fivefold to around 123,000 units. The Czech Republic and Poland are among the main export destinations, with some drones ultimately transferred to Ukraine and used on the battlefield.
The report also notes that the Taiwanese government has set policy targets to establish a fully “non-red” drone supply chain by the end of 2026 and to reach an annual production capacity of 180,000 drones by 2028. In addition, the government plans to procure more than 200,000 drones for Taiwan’s armed forces by 2033 in order to strengthen its asymmetric defense capabilities.
Some Taiwanese drones have already achieved complete “de-red” production. One manufacturer cited in the report noted that around 40% of its components previously came from China but are now sourced entirely from domestic suppliers or imported from countries such as Japan. Although this shift has increased costs, the company estimates that its drones are still roughly half the price of those manufactured entirely in Japan or South Korea.
The article also cites a DSET policy report noting that although Taiwan leads the world in advanced semiconductor manufacturing, certain technological gaps remain in the drone sector. These include flight-control, positioning and communications chips, as well as related software development. To address these gaps, the Taiwanese government has pledged funding to support industry development and aims to domestically produce half of the rare-earth magnets it requires by 2029.
Overall, the report concludes that while it will take time for Western countries to fully reduce their reliance on Chinese drone supply chains, growing security concerns over Chinese drone components—along with recent U.S. import restrictions on certain foreign-made drones—have created new opportunities. In this context, Taiwan has secured a promising early position in the ongoing restructuring of the global drone supply chain.
