DSET’s National Security Program continues its biweekly Drone Newsletter, curating key domestic and international developments across uncrewed systems policy, technology, and industry to help readers track Taiwan’s drone ecosystem and the security implications of global UAV/USV trends.
This week’s edition highlights a clear convergence: Taiwan’s proposed US$40 billion special defense budget and the U.S. 2025 National Defense Authorization Act (NDAA) both elevate drones and counter-drone systems as core elements of future defense posture. Notably, the NDAA—for the first time—explicitly includes U.S.–Taiwan language on “co-development and co-production” for uncrewed and counter-uncrewed systems. Meanwhile, Ukraine’s battlefield-driven deployment of naval drones in the Black Sea is rapidly shaping policy debates on maritime uncrewed operations, even as the Taiwan Strait’s harsher sea conditions pose distinct engineering and testing constraints.
Taiwan and US Defense Bills Focus on Expanding UAV/USV Procurement and Co-Production
On November 26, President William Lai announced a US$40 billion special defense budget following a high-level national security meeting, and published an op-ed in The Washington Post the same day. The Executive Yuan approved a draft “Special Act on Procurement for Enhancing Defense Resilience and Asymmetric Capabilities” the next day, proposing up to NT$1.25 trillion in additional defense spending for 2026–2033. The draft centers on building a multi-layered defense “shield,” accelerating kill chains with high tech and AI, and strengthening a “non-red” defense supply chain. While the uncrewed share remains unclear, reporting referenced in the newsletter points to a basket that may include roughly 50,000 domestically made drones, NCSIST’s Albatross II procurement, a large USV program, and U.S. purchases such as anti-armor UAVs. However, the bill’s legislative review has stalled after procedural obstruction by opposition parties, leaving content and timelines uncertain.
In Washington, the December 7 compromise NDAA includes up to US$1 billion for a Taiwan Security Cooperation Initiative in 2026. Section 1237 directs the U.S. Secretary of Defense to engage Taiwan by March 1, 2026 on a joint program to field uncrewed and counter-uncrewed systems, explicitly including “co-development and co-production.” It also calls for U.S. Coast Guard training teams to support maritime security, plus a Pentagon roadmap and assessments for mobilization and sustainment in a Taiwan Strait or broader Indo-Pacific crisis—while final funding remains subject to appropriations.
Taiwanese Navy Issues Public Solicitation for 1,500+ USVs
On December 8, Taiwan’s Navy issued a public solicitation covering one-way attack USVs and associated command-and-control elements. Liberty Times estimates procurement could reach 1,500+ units. Requirements emphasize speed (≥35 knots), range (≥250 nm), autonomous target identification and collision avoidance, operations in Beaufort force 4+ conditions, swarm capability, EO/IR sensors, and resilience against GNSS and radio jamming.
Furthermore, according to a report by CommonWealth Magazine titled “Uncrewed Vessels Double in Five Years: Taiwan’s Defense Industry Expands Beyond Drones as CSBC and Thunder Tiger Compete for New Military Orders”, several Taiwanese firms, including CSBC, Jong Shyn, Lungteh, and Thunder Tiger, are already developing uncrewed vessels, but firm orders and mass-production plans are still unclear.
NCSIST Pushes Drone Procurement and Testing, Further Materializing US-Taiwan Co-Production
The newsletter highlights concrete progress across NCSIST-led drone programs, signaling momentum in U.S.–Taiwan cooperation. Two systems stand out: the Albatross II medium-range UAV, now formally included in Taiwan’s procurement planning, and the Mighty Hornet IV attack drone, which is reportedly scheduled for live testing in the United States in January.
Together, these programs illustrate emerging cooperation pathways between Taiwan and U.S. partners, including platform-based collaboration with Kratos, system-level cooperation with Anduril on loitering munitions and underwater uncrewed vehicles, and software-enabled integration through Auterion’s swarming and operating systems. Among these, Kratos-linked designs are particularly notable for introducing longer-range capabilities into Taiwan’s current development pipeline, marking a qualitative shift beyond the short-range systems previously procured.
The US Gets Serious About ‘Drone Dominance’
The newsletter also highlights the U.S. plan to invest US$1 billion over two years to procure up to 300,000 small attack drones, beginning with a February–July 2026 “gauntlet” phase (12 firms producing 30,000 units), followed by later phases narrowing vendors while scaling output and lowering unit cost. Taiwan’s Thunder Tiger has publicly sought participation; its “Overkill” FPV was added to the Pentagon’s Blue UAS Cleared List in September, making it the first Taiwanese firm listed and a key case to watch in U.S.–Taiwan supply chain cooperation.
Are Naval Drones the Next Big Thing? Ukraine and Taiwan Seem to Think So
Ukraine’s “Sea Baby” naval drones have drawn attention for strikes against Russia’s “Shadow Fleet,” underscoring the strategic value of maritime uncrewed systems. Still, the newsletter stresses that the Taiwan Strait’s harsher sea states and dense shipping/fishing environment make direct replication challenging—placing a premium on local design, testing, and proof of mass-production readiness.
Ukraine is More and More Open to Sharing Its Drone Technology
Finally, the newsletter notes Ukraine’s growing openness to trading drone technology for allied capabilities—such as Poland’s talks over MIG-29 transfers in exchange for selected drone and missile technologies, and the UK–Ukraine “Project Octopus” to produce interceptor drones using UK manufacturing with Ukrainian tech. By contrast, while Taiwan’s DIDA MoU references Ukraine contributing to drone R&D, the extent of technology sharing remains unclear; Taiwan’s stated approach is to deepen technical cooperation to access critical battlefield “lessons learned.”
