About DSET Drone Newsletter

DSET’s National Security Group publishes a biweekly drone newsletter. It reviews a curated selection of the most noteworthy domestic and international sources, providing insights into the development of Taiwan’s drone industry and the implications of global unmanned aerial vehicle (UAV) trends for Taiwan.

Drone Highlights This Week:

  1. The Taiwanese government announced plans to procure nearly 100,000 drones in the coming years.
  2. Official from Taiwan’s Ministry of Foreign Affairs unveiled the country’s new “Drone Diplomacy” initiative.
  3. The U.S. 2026 National Defense Authorization Act (NDAA) passed the Senate, including an unprecedented U.S.–Taiwan drone co-production provision.
  4. The U.S.–Ukraine drone deal advanced, providing a potential model for Taiwan’s international cooperation.
  5. The EU’s Drone Wall focuses on C-UAV systems, paralleling Taiwan’s new developments.

Taiwan’s New Drone Goal: 100,000 Units to Be Procured by 2030

Taiwan announced its largest-ever drone procurement over the past two weeks. Beyond the 48,750 military drones previously slated for procurement by the Ministry of National Defense (MND), the Executive Yuan (Taiwan’s Cabinet) announced on October 16 that it is adding another 50,898 drones for civil and government use. This combined effort brings the total procurement to nearly 100,000 drones over the next six years (2025–2030). Compared to the previous procurement of 3,422 drones completed in 2024, this represents an ambitious and unprecedented surge.

Budget-wise, the Ministry of National Defense (MND) procurement is expected to be near NT 50 billion (approximately US 1.6 billion). Separately, the Executive Yuan approved an NT44.2 billion (approx.US 1.44 billion) development plan for the broader uncrewed vehicle industry (including UAVs, USVs, and UUVs). This latter budget is allocated across several areas—procurement, R&D, and industrial park planning—leaving the exact percentage earmarked for the 50,898 units of civil/government procurement currently unclear.

Following the new announcement, President Lai  confirmed last week that his administration plans to propose a “Special Budget for Asymmetric Warfare and Operational Resilience” in the near future; which is expected to fund the MND procurement.

It remains unclear whether more UAS will be funded under the special budget. Reports also indicate that some systems developed by the National Chung-Shan Institute of Science and Technology (NCSIST) may be included, notably the Mighty Hornet loitering munition and Albatross II UAS— the sensor-to-shooter pairing showcased at the Taipei Aerospace and Defense Technology Exhibition (TADTE) in September.

Beyond UAVs: USVs & UUVs in Focus

President Lai’s reference to the supply chain of “uncrewed systems” hints at a broader effort. While current large-scale procurement focuses on UAS, Taiwan has also accelerated the development and adoption of uncrewed surface vessels (USV) and uncrewed underwater vehicles (UUV).

Reportedly, USV are also included in the upcoming special budget, indicating that three USV variants are planned by the Navy: one for reconnaissance, one for combat engagement, and one for minehunting operations. Together, tenders for more than a thousand units can be expected.

Beyond the Navy, the Coast Guard Administration and its parent agency, Ocean Affairs Council (OAC), have also shown interest in USV and UUV development. Under the Resilience Special Budget that took effect on October 23, they reportedly allocated funding for maritime reconnaissance USVs and research-oriented USVs.

Cross-Agency Drone Procurement Accelerates

Government drone procurement has become a cross-agency effort, with trends visible in publicly announced projects:

  • Ministry of National Defense (MND): Next year’s budget includes several small-scale procurement projects to test new systems, reflecting near-term operational priorities.
  • Army: Fiber-optic drones (widely used in Ukraine), night-vision drones, and cable-connected multirotor drones will undergo evaluation. The Defense Innovation Office supports accelerated adoption.
  • Navy: Funding allocated for autonomous underwater glider navigation and acoustic-tracking systems, corresponding to small-scale remotely operated vehicle (ROV) procurement announced in summer 2025.
  • Military Police Command: Exploring first-person-view (FPV) systems and Group 1/2 small UAS; October procurement notice requires over 40% of airframe to be 3D-printable.
  • R&D Support: Since 2024, the Office of Advanced Capabilities (OAC) has run the annual “Marine Science and Technology Project Subsidy Program,” funding USV and UUV development. From 2026–2028, the MND will launch the “Integrated Development Program of Advanced Uncrewed System Technology” to boost R&D in uncrewed and counter-uncrewed systems.
  • Budget Scale: Although full details have not yet been disclosed, preliminary allocations indicate significant investment: NT$58 million for the National Police Agency, NT$80 million for the Ministry of Health and Welfare, and NT$117.5 million for the Ministry of Agriculture—totaling several hundred million NTD and supporting Taiwan’s uncrewed systems industry.

Procurement Boosts Output, Performance Still Challenging

Taiwan’s unprecedented drone procurement plan has significantly boosted production capacity and spurred international collaboration. DSET interviews with local manufacturers identified insufficient government procurement as a key growth barrier, especially given Taiwan’s reliance on costlier non-Chinese components. Government and defense purchases have therefore been critical for industry development. 

The 100,000-drone order has changed the game. From June 2024–2025, Taiwan produced around 10,000 drones annually, but exports surged to nearly 50,000 by Q3 2025. While still modest, growth is strong and expected to continue with new procurement. Under this large-scale initiative, Taiwan’s largest-ever defense exhibition (TATDE 2025) attracted record international participation, demonstrating that major procurement draws foreign investment, joint production, and advanced technologies. 

Despite rising production, Taiwan’s drone supply chain still faces challenges. Upon announcing the procurement, the Executive Yuan highlighted gaps in key technologies and plans significant R&D investment. International collaborations remain in early stages, and successful integration of advanced systems will be a key area to watch going forward.

Taiwan Launches “Drone Diplomacy” for Allies

Beyond procurement, Taiwan is also integrating drones into its diplomatic strategy. On October 22, Taiwan signaled a new wave of “drone diplomacy”, aiming to supply drones to allies and like-minded European partners facing Russian aggression. The plan was noted by Charlie Chiang (江振瑋)—head of the Ministry of Foreign Affairs’ (MOFA) Department of NGO International Affairs and former director-general of Chiayi County’s economic development department—who helped launch the Asia UAV AI Innovation Application R&D Center. 

A new task force will first donate civilian drones to diplomatic allies for agriculture, disaster relief, and coast guard operations, then expand to Japan, the Philippines, and Central and Eastern Europe, including Estonia, Latvia, Lithuania, Poland, Czechia, and Germany. The initiative aligns with Taiwan’s plan to procure 100,000 drones, but whether these donations and exports count toward the plan’s 50,000 civilian and 48,750 military allocation bears watching.

New 2026 US NDAA Bill Includes TW-US Drone Co-Production

Meanwhile, support from allies for Taiwan’s drone production is also growing. 

In August this year, during his visit to Taiwan, where he met the President, U.S. Senate Armed Services Committee Chairman Sen. Roger Wicker hinted that Taiwan and the U.S. would soon engage in joint production of weapons and military efforts, attracting widespread attention. When the NDAA for Fiscal Year 2026 passed the Senate this October, it marked the first inclusion of joint production with Taiwan on uncrewed and counter-uncrewed systems. 

Section 1237 of the bill specifies that products of this collaboration will be deployed in both the US and Taiwan—solified by a Reciprocal defense procurement Memorandum of Understanding (MOU)—and there must be progress by March 1, 2026. NCSIST’s new MOUs with US companies (Aerovironment, Anduril, MARTAC, Northrop Grumman) this September suggests the collaboration has already begun. Comparatively, the 2025 NDAA only addressed partnering on military trauma care, industrial base cooperation, and transferring defense articles to support Taiwanese stockpiles. This demonstrates a shift from merely supplying Taiwan with sustainment resources to facilitating co-development and co-production.

Although the NDAA must still pass the House and be reviewed by the President, Section 1237  indicates US recognition of drones’ strategic importance and the potential to increase quality and production capacity of uncrewed systems with Taiwan’s collaboration.

Could the US-Ukraine ‘Drone Deal’ Be a Model for Taiwan? 

Beyond NDAA developments, the new U.S.-Ukraine drone partnership offers lessons for Taiwan’s future cooperation with the U.S. and Ukraine. This October, the Ukrainian Ministry of Defense clarified the prospective ‘Drone deal’  as a 5-year contract providing the US with Ukrainian drones and establishing joint production for Ukrainian models. WSJ suggests this blends US efforts to capitalize on Ukraine’s drone expertise and Ukraine’s aim to solidify security relations. 

Unlike the UK-Ukraine tech sharing agreement to co-produce interceptor drones—where all products would be shipped to Ukraine as military aid—this deal would provide the US with Ukrainian drones and potentially circumvent export controls depending on manufacturing location. Neither the UK nor the US have disclosed the proportion of manufacturing to be conducted in Ukraine.

This level of industrial and production cooperation, along with deeper integration into the US defense ecosystem, is what Taiwan hopes to achieve, prompting a critical question: could Taipei mirror the US-Ukraine model to streamline aid, technology transfers, and industrial collaboration? 

Thunder Tiger’s recent achievement as the first Taiwanese firm to join the U.S. DIU Blue UAS certified list marks a foundational step in this direction, but U.S. procurement of Taiwanese drones remains limited. Concurrently, Taiwan is strengthening ties with Ukraine’s drone sector. The Ministry of Economic Affairs invited the Ukrainian Iron Cluster to visit Taiwan in June, and AIDC, chair of TEDIBOA—Taiwan’s national drone alliance—recently signed an MOU with Ukrainian counterparts. However, Taiwan still faces Ukraine’s export controls on both drone hardware and software.

As U.S.-Ukraine deals advance, Taipei will be watching closely.

The EU ‘Drone Wall’ Parallels Taiwan’s Push for C-UAS Development

On the counter-UAS front, Taiwan is also making progress.

On October 16, the European Commission unveiled its Defence Readiness Roadmap 2030, detailing the European Drone Defence Initiative. The planned ‘Drone Wall’ expects to reach initial capacity by 2026 and be ‘fully functional’ by the end of 2027. This project responds to numerous Russian drone incursions and was initiated by Commission President, Ursula von der Leyen, as part of an ‘eastern flank watch’.  It strives to create a mutli-domain surveillance system with counter-drone capabilities by integrating technologies like radars, jammers, sensors, trackers, directed energy, and interceptor UAS to detect, track, and neutralize. Interoperability amongst Member States will improve data sharing and situational awareness. 

Accordingly, C-UAS demand in Europe has surged: Germany selected Tytan Technologies for an antidrone system, Sweden announced a $370M investment into UAS countermeasures, including drone interceptors and jamming sensors, and so on. 

Europe’s focus on flexible, interoperable, multi-layered C-UAS—combining sensors, C2, and both non-kinetic and kinetic effectors—underscores that detection and tracking are as vital as neutralization. 

Taiwanese companies are responding: Tronfuture’s “Anti-Drone Defense System”  includes passive RF sensors, AESA radars and jammers (26 military orders), while AIDC’s “UAV Countermeasure System” includes active/passive radar, EO/IR (Optical and Infrared Detection Module), and intelligence databases. Both efforts demonstrate adjustments towards comprehensive, multi-sensor, and coordinated effector C-UAS systems.