About DSET Drone Newsletter:

DSET’s National Security Program 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 uncrewed aerial vehicle (UAV) trends for Taiwan.

This Issue’s Drone Highlights:

  1. DSET in the news: This week, DSET spoke separately with The Economist and The Japan Times. Both outlets focused on Taiwan’s surging drone exports to Ukraine—now totaling around 122,000 units. New disclosures from companies such as Kunway, Thunder Tiger, and AbonMax regarding their exports to Ukraine are particularly noteworthy.
  2. Taiwan’s lessons from Iran–U.S. drone warfare: Iran’s Shahed drones, along with the U.S.’s modified “LUCAS” drones (adapted from the Shahed platform), have drawn significant attention. In fact, Taiwan’s NCSIST has already developed a comparable system derived from Israel’s Harpy drone, capable of long-range strikes exceeding 1,000 km. Meanwhile, the U.S. Replicator initiative has recently shifted its focus toward long-range UAVs. Future U.S.–Taiwan cooperation in this area will be worth close attention.
  3. Zelensky’s counter-Shahed offer: Ukraine has publicly offered to provide the U.S. with interceptor drones to counter Shahed attacks. According to DSET research, interceptor drones are also a key area that Ukrainian stakeholders have identified for potential Taiwan–Ukraine collaboration.
  4. U.S.–Taiwan AI progress: Taiwan’s NCSIST has begun testing collaborative efforts with Shield AI, Anduril, and Auterion, aiming to enhance its AI-enabled drone capabilities.
  5. EU drone policy moving forward: The EU has released its 2026 Drone Security Action Plan, introducing stricter standards that favor trusted partners. It will be important to monitor whether the EU follows last month’s European Parliament call to include Taiwan as a partner.
  6. U.S. Drone Dominance—first round results: The U.S. Department of Defense has awarded contracts to 11 companies for a total of 30,000 attack drones, with three additional “Gauntlet” rounds planned. No Taiwanese firms were selected in this round; however, Thunder Tiger noted that it is supplying components to three of the 25 participating companies.
  7. China targets Japan’s drone supply chain: China has announced a new round of export controls targeting Japan’s drone supply chain. In comments to The Japan Times, DSET noted that the current momentum could be beneficial for deepening Japan–Taiwan cooperation.

(Read the full newsletter on DSET’s website here.)


1、DSET Speaks with The Economist and The Japan Times on Drones

(Author: Chih-Cheng Sung)

This week, DSET was interviewed separately by The Economist and The Japan Times. Both outlets focused on Taiwan’s rapidly growing drone exports to Ukraine, which have now reached approximately 122,000 units.

The Economist highlighted Taiwan’s efforts to develop a “non-red” drone industry—free of Chinese components—and its positioning as a key partner in the drone supply chains of democratic countries, while also examining the sector’s rapid expansion and remaining technological challenges.

The Japan Times emphasized that, driven by battlefield demand, Taiwan is evolving into a supplier of battlefield-relevant drone systems and expanding its international presence through exports to Europe, while still facing constraints related to cost structures and limited domestic procurement.

Notably, companies such as Kunway Technology, Thunder Tiger, and AbonMax have recently disclosed details of their exports to Ukraine, further underscoring the growth momentum of Taiwan’s drone industry.

2、Lessons from Iran’s Drone Warfare for Taiwan: U.S.–Taiwan “Shahed-like” UAVs

(Author: Cathy Fang)

Combat operations over Iran have confirmed a decisive shift in military economics: from high-cost exquisite platforms toward mass deployment of low-cost, AI-enabled systems. The Low-cost Unmanned Combat Attack System (LUCAS), reportedly derived from Iran’s Shahed-136 and combat-proven in Operation Fury, embodies this logic. At US$35,000 per unit, roughly 1/850th the cost of an MQ-9 Reaper, it integrates AI-enabled targeting, Starlink-hardened navigation, and mesh-networked swarm coordination across strike, reconnaissance, and electronic warfare roles. For Taiwan, the lesson is clear: low-cost airframes upgraded with AI and networked autonomy now constitute a credible instrument of asymmetric power projection.

Taiwan’s Shahed Equivalent: Chien Hsiang and Mighty Hornet II

Taiwan already fields its answer. The Chien Hsiang, sharing close design resemblance with Israel’s Harpy loitering munition, and the Mighty Hornet II, its multi-role evolution on the same architectural baseline, represent Taiwan’s closest functional equivalents to the Shahed, both operationally aligned with the long-range attritable strike paradigm the Shahed validated. The Chien Hsiang autonomously detects and engages radar emitters without terminal-phase human intervention, with approximately 200 units serving under ROCAF Air Defense and Missile Command. The Mighty Hornet II extends the mission set with EO/IR targeting at lower cost, though procurement remains unconfirmed in open sources. Together, they form the nucleus of the attritable long-range strike network, a capability that exists but has yet to be fielded at decisive scale.

Implications for the Taiwan Strait

With strike ranges of approximately 1,000 km — nearly six times the strait’s 180 km average width — both platforms can hold China’s eastern seaboard at sustained risk from protected positions on Taiwan proper. Mass coordinated employment could systematically degrade radar installations, early-warning sensors, and integrated air defense networks, eroding the command-and-control architecture any cross-strait operation depends upon. U.S. policy reinforces this trajectory. The Defense Autonomous Working Group (DAWG), the Pentagon’s institutional home for Replicator, is explicitly focused on “larger, longer-range, one-way attack drones,” precisely the profile LUCAS embodies. Operation Fury thus may prove not a singular event, but the opening preview of the “Hellscape” the United States intends to actualize across the Western Pacific.

3、Zelensky’s counter-Shahed offer

(Author: Samara Duerr)

After the U.S. and Israel launched a joint military campaign—labeled Operation Epic Fury—against Iran this past February 28, the subsequent retaliatory UAV attack waves catalyzed the U.S to seek counter drone technology from Ukraine. Following the U.S.’s request, Ukraine immediately sent interceptor drones and a team of experts to military bases in Jordan—although President Trump denies the US need for Ukrainian assistance. 

Ukraine, which has been subjected to tens of thousands of Iranian-designed Shahed drone attacks by Russia, has developed highly effective interceptor drones for as little as $1,000 USD per unit. Moreover, looking to gain a strategic edge, Ukrainian President Volodymyr Zelensky has suggested exchanging the Ukrainian interceptor drones the U.S. desires to employ against Iranian Shaheds for U.S. Patriot air defences that Ukraine can utilize against Russian ballistic missiles. 

Notably, Ukraine now has 20+ companies manufacturing interceptor drones and claims a mission success rate exceeding 60%. In 2025, the National Security and Defense Council of Ukraine stated Ukraine produced 100,000 interceptor drones. 
In comparison, Taiwan’s counter drone technology is a nascent industry. Starting in 2022, Taiwan began dispersing handheld C-UAV guns and placing remote-controlled defence systems around critical infrastructures in Kinmen and Matsu. This was followed by a NT$988 million “Anti-Drone System Project” awarded to Tron Future Tech in 2025 for installation in Kinmen, Matsu, and Taoyuan, and a NT$4.35 billion anti-drone defense initiative to protect military infrastructures. The latest update in this sector is the “Portable Uncrewed Aerial System Countermeasure Procurement Program” (2026–2028), which is to be funded by a special defense budget to secure 635 portable C-UAS units. While promising, these signify very limited government procurement figures. As seen from Ukraine—and now the U.S— the rapid production of low-cost, highly effective interceptors undoubtedly increases defense resiliency and is increasingly necessary in modern conflict.

4、Taiwan Doubles Down on U.S. AI Partnerships in Unmanned Systems

(Author: Cathy Fang)

NCSIST is systematically deepening cooperation with U.S. defense technology firms to accelerate AI-enabled autonomous systems development, building on established partnerships with Anduril and Auterion.

In February, NCSIST partnered with Shield AI to integrate the Hivemind autonomy platform across Taiwan’s indigenous unmanned systems. Hivemind delivers real-time autonomous perception, decision-making, and swarm coordination without continuous human control, engineered specifically to operate in GPS-denied and communications-contested environments. Concurrently, NCSIST is reportedly advancing the Tianqin Project (天琴專案) — a NT$9 billion AI-enabled loyal wingman program designed to operate alongside the Indigenous Defense Fighter (IDF), drawing on the Kratos XQ-58 Valkyrie airframe architecture with F124-derived propulsion. If realized, it would represent Taiwan’s first indigenous high-end autonomous combat aircraft.

Together, these initiatives reflect a two-track unmanned strategy: embedding AI autonomy into small and medium platforms in the near term, while developing a larger loyal wingman capability for future high-end air combat.

5、EU Launches Action Plan to Tackle Growing Drone Threats

(Author: Ting-Wei Lin)

The European Commission on February 11, 2026 unveiled an Action Plan on Drone and Counter-Drone Security, responding to a series of drone incidents last September that disrupted airports, energy infrastructure, and external borders across Europe. Worth noting: the Action Plan is primarily a civilian security and cross-border coordination framework, rather than a policy plan for defense procurement or industrial funding.

Built on Drone Strategy 2.0 (published in 2023) and designed to complement the Defence Readiness Roadmap 2030 (published in October 2025), the plan targets four priorities: strengthening preparedness, threat detection, cross-border response coordination, and defense readiness. Key measures include mandatory registration for drones above 100g, an EU Trusted Drone Label, and a Drone Alliance with Ukraine. Member States will be asked to appoint National Drone Security Coordinators to oversee national implementation.

While tighter EU drone security standards favor trusted, non-red supply chain partners like Taiwan, it remains unclear whether the Commission will act on the January 2026 European Parliament resolution—which explicitly named Taiwan as a trusted drone partner—or whether this civilian-defense synergy plan will translate into any meaningful industrial opening for Taipei.

6、The U.S. Progresses its ‘Drone Dominance’ Plan

(Author: Samara Duerr)

On March 6th, the U.S. Department of Defense announced the 11 companies who were selected to receive its drone orders—after extensive evaluations on their UAV’s performance, military operators, and production and supply chain capabilities. This list includes 8 American companies, 1 British company (Skycutter, which was the top scorer in the Drone Dominance Program’s first Gauntlet), 1 Ukrainian company (Ukrainian Defense Drones (UDD), and 1 Swiss-American company (Auterion). All have passed NDAA/Blue UAS compliance verification.

Across these winners, orders for 30,000 small one way attack drones will be placed and distributed to 17 U.S. military units in the next 5 months. The DOD plans to hold 3 more Gauntlets in which the goals are to decrease unit price down to $2,000 USD or less and increase the volume of orders—with phase two  procurement expected to be around 50,000 to 60,000 drones. 

Notedly, Taiwan’s UAV manufacturer Thunder Tigers obtained Blue UAS certification for its ‘Overkill FPV’ last September. It is the first and, so far, only Taiwanese company to gain this clearance. While the company stated its intention of participating in the first Drone Dominance Gauntlet, it was ultimately not selected to compete. However, as it stands, it already supplies 3 of the 25 companies who participated in the first gauntlet with components. Moreover, both companies who participated in the first phase and didn’t receive orders and companies who didn’t participate at all are eligible to compete in the following Gauntlets—meaning Thunder Tigers may yet be the first Taiwanese private defense company to secure a U.S. defense contract. 

7、China’s Export Controls, Japan’s Drone Challenge, and Taiwan’s Opportunity

(Author: Ryan Teng)

On February 24, China’s Ministry of Commerce issued Announcement No. 11, placing 20 Japanese entities on its export control list and prohibiting the export of “dual-use items” to them. On the same day, Announcement No. 12 placed another 20 entities on a watchlist. These lists included subsidiaries of major Japanese drone-related companies, including Mitsubishi Heavy Industries and Kawasaki Heavy Industries.

This move is widely seen as a follow-up to China’s Announcement No. 1, issued in January, which tightened controls on the export of “dual-use items” to Japan. Although Beijing did not clearly define what constitutes “dual-use items,” China’s Catalogue of Dual-Use Items and Technologies Subject to Import and Export License Administration indicates that rare earth materials essential for manufacturing key drone components—such as batteries and motors—fall within the scope of such controls.

These export restrictions will test Japan’s ability to advance its drone industry, particularly as the Takaichi administration has announced its goal of building 80,000 Japan-made drones and establishing a stable supply chain for domestically produced UAVs. Although the Japanese government is working to reduce its dependence on Chinese rare earths, in the short term Japanese drone manufacturers will need to source alternative components. In this context, Taiwan’s drone components sector is likely to find greater opportunities for cooperation with Japan.



Author Biographies

Cathy Fang

Cathy Fang serves as a Policy Analyst in the National Security and Economic Security Research Program at DSET, where she specializes in analyzing the convergence of technology and geopolitical dynamics. Her research portfolio encompasses critical technological domains, with particular emphasis on the semiconductor industry and the strategic implications of emerging technologies including unmanned aerial vehicles, satellite systems, and subsea telecommunications infrastructure. Currently, she contributes as an editor and podcast host at US-Taiwan Watch. Prior to her role at DSET, she held the position of policy analyst at the Project 2049 Institute. Her professional background includes tenure as a legislative assistant at Taiwan’s Legislative Yuan and research experience at the Institute of International Relations, National Chengchi University (NCCU). She holds an M.A. in Asian Studies and International Security from the Elliott School of International Affairs at George Washington University, and a B.A. in Political Science from National Chengchi University.

Samara Duerr

Samara Duerr serves as a policy analyst for the National Security and Dual-use Technology (NSDT) taskforce at DSET. Samara earned a Master’s degree in Asia Pacific Studies at National Chengchi University in Taiwan, a Bachelor’s degree in International Relations and Chinese Studies at Emory University in the US, and has also studied at Yonsei University in Seoul and the School of Oriental and African Studies (SOAS) in London. Her research focuses on dual use technology in relation to Taiwan-US and Taiwan-EU cooperation. With an emphasis on techno-geopolitics, her work specializes in the drone supply chain, emerging technology, and US-Taiwan relations.

Ting-Wei Lin

Ting-Wei Lin is a journalist and researcher, serving as a Non-Resident Fellow at DSET’s National Security Program. Her research focuses on defense technology and supply chain resilience. Lin specializes in the intersection of technology and geopolitics, cross-strait relations, and Taiwan’s public policy. Her work has appeared in Agence France-Presse, Initium Media, The Reporter, and other publications. She holds a B.A. in Anthropology from National Taiwan University.

Hung-Yuan Teng

Hung-Yuan TENG is currently a Policy Analyst of the National Security Program at DSET. His primary research focuses on Taiwan–Japan cooperation in the field of UAVs and the interplay between emerging technologies and geopolitics. Before joining DSET, he interned at the Taiwan Association for Human Rights, where he focused on the forced eviction case of the Tsai Jin-Mu residence along the Sindian Liugong Irrigation Canal, as well as human rights issues in Hong Kong, Tibet, and China. He holds a degree from Ritsumeikan Asia Pacific University (APU) in Japan, where his research centered on government foreign policy decision-making.

Chih-Cheng Sung

Chih-Cheng Sung currently serves as a Senior Analyst at DSET, specializing in public relations and policy analysis. He previously served as Chief of Staff in a legislative caucus office at the Legislative Yuan, where he was responsible for policy research and legislative strategy. With in-depth knowledge of parliamentary operations and the policymaking process, he brings extensive experience in policy coordination and advocacy. Mr. Sung holds a Master’s degree in Political Science from National Chengchi University.