TAIPEI (Taiwan News) — Taiwan’s strong capabilities in ICT and semiconductor R&D and manufacturing are expected to boost its local drone industry and enhance its international competitiveness, according to Wired.

Global conflicts, particularly those in Ukraine, Iran, and Israel, have underscored the critical role of unmanned aerial vehicles (UAVs) in modern combat. In response to growing military threats from China, the Taiwanese government has initiated a plan to fortify its domestic drone industry.

In 2022, Taiwan launched a national drone team to merge government and private sector resources. Inspired by Ukraine's battlefield experience, the initiative aims to develop low-cost drones capable of reconnaissance or attack.

However, Taiwan's policy of using China-free components presents a significant challenge. This approach makes it difficult to compete with Chinese manufacturers, particularly DJI, which dominates over 70% of the global drone market, in terms of cost and production scale.

Further bolstering its drone industry, the government has established the Asia UAV AI Innovation Application R&D Center in Chiayi. It has also awarded procurement contracts for military drones and provided subsidies to companies developing critical components, including flight control systems and AI-powered processing chips.

Despite Taiwan's global leadership in the semiconductor and battery industries, few domestic companies focus on developing chips specifically for drones. Some local drone manufacturers rely on processors from major international firms like Qualcomm and Nvidia.

This dependence poses challenges, as these chips are costly and not tailored for UAV applications. This could limit performance optimization and drive up production costs for Taiwanese manufacturers.

Cathy Fang (方怡然), a policy analyst at the Research Institute for Democracy, Society, and Emerging Technology (DSET), said Taiwan produced an estimated 8,000 to 10,000 drones last year—well below the government’s goal of 180,000 units annually by 2028.

Fang cited several key challenges, including high manufacturing costs, limited domestic procurement, and a lack of orders from foreign government agencies.

To improve competitiveness, Fang urged the government to expand defense procurement. In July, the Ministry of National Defense announced plans to purchase approximately 11,270 drones in 2026 and around 37,480 in 2027.

She also recommended that Taiwan develop a clearer industry strategy, strengthen cooperation with the US, reduce export tariffs, and help domestic firms join the US Department of Defense’s Blue UAS procurement list.

Kyle Chiu (邱仕敏), director of the Taiwan Trade Center in Vancouver, added that Canada is expanding its drone sector and procurement efforts. He encouraged Taiwanese firms to explore R&D partnerships and business opportunities in Canada.