AmCham Magazine Features Taiwan’s Drone Industry, Citing DSET Analysis

On April 20, The American Chamber of Commerce in Taiwan (AmCham) published an in-depth feature in its flagship monthly magazine, Taiwan Business TOPICS, examining the current development and challenges of Taiwan’s drone industry. The report highlights Taiwan’s ongoing efforts to build “non-Chinese supply chains,” alongside rapid growth in exports and industrial output. However, it also notes that limitations in systems integration, delays in defense procurement mechanisms, and intensifying global competition may constrain the industry’s pace and scale of expansion.

The article draws extensively on insights from domestic and international defense experts and industry representatives, including former Chief of the General Staff Lee Hsi-ming, Shield AI co-founder Brandon Tseng, Aerospace Industrial Development Corporation (AIDC), and representative from Polish UAV Industry Association (PISB). It also features interviews with DSET Policy Analyst Samara Duerr and Non-Resident Fellow Ting-Wei Lin.

According to the article, Taiwan’s drone industry has experienced rapid growth in recent years. Drone exports reached approximately 122,000 units in 2025—more than 30 times higher than the previous year. Industry output rose from NT$5 billion in 2024 to NT$12.9 billion in 2025, with the Ministry of Economic Affairs projecting total output could reach NT$20 billion in 2026. Export destinations are primarily concentrated in Central and Eastern Europe, with the Czech Republic and Poland as the largest markets, while the United States ranks third.

In terms of certification and international integration, the article notes that Taiwan’s Industrial Technology Research Institute (ITRI) has signed a “Green UAS” certification agreement with the Association for Uncrewed Vehicle Systems International (AUVSI), making Taiwan the only location outside the United States capable of conducting this cybersecurity evaluation for drones. In addition, drones developed by Thunder Tiger have been reviewed by the U.S. Department of Defense and included on the Blue UAS Cleared List. The report further cites Ting-wei Lin, noting that Thunder Tiger is planning to participate in the U.S. Drone Dominance Program to pursue government procurement opportunities. Although not included in the initial selection round, the company is considered to have future potential and is already supplying components to related firms.

However, the article also emphasizes several structural challenges facing Taiwan’s drone industry. On the demand side, Samara Duerr notes that Taiwan’s drone demand has been significantly driven by the Russia–Ukraine war. “If the war ends, related demand may decline, making Taiwan’s capacity expansion strategy more complex,” she said, warning of potential dual pressures from weakening demand and intensified global competition.

On the supply chain side, the article underscores China’s continued dominance in the global drone market, with DJI products priced 50%–70% lower than comparable U.S. systems. While Taiwan’s drones maintain a cost advantage over U.S. products, they remain approximately 25% more expensive than Chinese-made alternatives. In addition, critical materials such as rare earth magnets and germanium are still largely dependent on Chinese supply, making the development of “non-Chinese supply chains” particularly challenging.

In terms of systems integration, the article notes increasing collaboration between U.S. defense technology firms—including Anduril Industries, AeroVironment, and Shield AI—and Taiwan’s National Chung-Shan Institute of Science and Technology (NCSIST) to support the development of key capabilities. However, Duerr points out that unlike Ukraine—where platforms such as the Delta system enable integrated battlefield coordination and real-time situational awareness—Taiwan’s drone ecosystem remains highly fragmented, with limited interoperability between systems.

She recommends that Taiwan develop a unified command-and-control architecture and better integrate software and technologies obtained through cooperation with U.S. firms in order to improve overall system performance and interoperability.

Duerr also emphasized that “Taiwan cannot directly replicate the Ukrainian model,” noting that Taiwan’s island geography creates fundamentally different operational requirements. For example, sea-surface reflections across the Taiwan Strait may interfere with sensors, affecting drone performance and endurance. As a result, Taiwan must continue to build practical experience in technology localization.

In April, DSET released research on Taiwan–Europe and Taiwan–Ukraine drone cooperation, based on interviews with more than 50 industry stakeholders and institutions across Taiwan, Ukraine, and Europe. The report offers policy recommendations for strengthening international cooperation and supply chain positioning. DSET will continue monitoring the development momentum of Taiwan’s drone industry in the United States, Japan, and European markets.

Founded in 1951, AmCham Taiwan promotes foreign investment and business development in Taiwan, representing more than 500 companies and approximately 1,200 members. Taiwan Business TOPICS is its flagship monthly publication covering Taiwan’s economic, policy, and industrial developments.