As Japan accelerates efforts to strengthen its domestic drone industry, Japanese media have increasingly focused on Taiwan’s policy initiatives and industrial developments in the sector. Japan’s Sankei Shimbun recently reported on Taiwan’s efforts to establish a “non-red supply chain” for drones, while noting that recent defense budget reductions may affect the pace of industry development. The report cited analysis from Hung-Yuan Teng, an analyst at the National Security Program of the Research Institute for Democracy, Society and Emerging Technology (DSET).
In its May 12 report, Sankei Shimbun noted that China currently accounts for more than 70 percent of the global commercial drone market, and Taiwan has historically relied on China-linked supply chains for drone-related manufacturing. However, amid growing security concerns across the Taiwan Strait, developing a secure and resilient drone supply chain has become an increasingly important component of Taiwan’s broader national security and economic resilience strategy.
The report noted that President Lai Ching-te outlined the goal of positioning Taiwan as an “Asian hub for the democratic drone supply chain” in his 2024 inaugural address, contributing to the rapid development of Taiwan’s drone ecosystem. According to Taiwan Customs data, Taiwan’s drone exports exceeded 181,000 units in the first quarter of 2026, surpassing the total export volume for the entire year of 2025.
Commenting on Taiwan’s industrial advantages, Teng said that Taiwan’s strengths as a major electronics manufacturing base, including competitive manufacturing capabilities and a strong semiconductor sector, provide an important foundation for the development of AI-enabled drone technologies.
The report also highlighted Taiwan’s efforts to expand international cooperation and participation in global supply chains. Overkill FPV, a suicide drone developed by Thunder Tiger Group, has obtained U.S. Blue UAS certification, becoming the first company in Asia to receive the certification. In addition, the Taiwan Excellence Drone Industry Alliance for Overseas Business Opportunities (TEDIBOA), an industry alliance comprising more than 260 companies, signed a memorandum of understanding with Ukraine’s defense industry network Iron Cluster in 2025. The cooperation has since led to procurement of drone components from Taiwanese suppliers by at least seven Ukrainian companies, reflecting Taiwan’s emerging role in secure and diversified drone supply chains.
Nevertheless, Sankei Shimbun noted that Taiwan’s drone industry continues to face structural challenges, including limited domestic market scale. A previously planned Ministry of National Defense procurement program involving more than 200,000 military drones has faced uncertainty following reductions to the defense budget. Prior to the budget decision, Teng noted that delays to the procurement program could postpone the development timeline of Taiwan’s drone industry by one to two years, potentially affecting industrial expansion and supply chain formation.
The National Security Program of DSET continues to monitor developments related to drones, economic security, and supply chain resilience. The program has recently provided analysis to international media outlets, including Nikkei Asia, The New York Times, The Guardian, Agence France-Presse (AFP), and Le Figaro, and will continue to conduct research on emerging technologies and their geopolitical and economic implications.
