Taiwan’s semiconductor and ICT strengths are driving growth in its local drone industry. Moreover, the government and private sector collaborate to boost the country’s UAV competitiveness. As global conflicts in Ukraine, Iran, and Israel highlight drones’ importance, Taiwan aims to capitalize on this trend.
To begin with, Taiwan launched a national drone team to merge resources and speed innovation. Inspired by Ukraine’s battlefield drone use, the country wants to develop low-cost drones for reconnaissance and attack. However, Taiwan’s policy to avoid Chinese components presents a significant obstacle. Consequently, competing with Chinese giant DJI, which controls over 70% of the global drone market, remains difficult.
Furthermore, the government established the Asia UAV AI Innovation Application R&D Center in Chiayi. It also awards military drone contracts and offers subsidies to companies developing key parts, such as flight control systems and AI-powered chips. Nevertheless, few local firms develop drone-specific chips despite Taiwan’s semiconductor leadership.
As a result, many Taiwanese drone makers rely on costly processors from Qualcomm, Nvidia, and others. These chips lack UAV-specific optimizations, increasing costs and limiting performance. According to Cathy Fang, a DSET policy analyst, Taiwan produced only 8,000 to 10,000 drones last year. This figure falls far short of the government’s 2028 goal of 180,000 units annually.
Moreover, Fang pointed out high manufacturing costs, limited domestic procurement, and weak foreign orders as key challenges. Therefore, she urged the government to increase defense drone purchases. Recently, Taiwan’s Ministry of National Defense announced plans to buy over 11,000 drones in 2026 and nearly 37,500 in 2027.
In addition, Fang recommended clearer industry strategies, stronger US cooperation, reduced export tariffs, and help for local firms to join the US Department of Defense’s Blue UAS procurement list. Likewise, Kyle Chiu, director of the Taiwan Trade Center in Vancouver, highlighted Canada’s growing drone market. He encouraged Taiwanese companies to seek R&D collaborations and business opportunities there.
In conclusion, Taiwan’s semiconductor and ICT strengths provide a strong foundation. However, overcoming supply chain challenges and scaling production remain vital. With government support and global partnerships, Taiwan aims to expand its drone industry rapidly. Ultimately, Taiwan’s drone ambitions depend heavily on leveraging Taiwan’s semiconductor and ICT strengths to compete internationally.
