Monday, September 15, 2025 from 12:00PM – 1:30PM (ET)
In-person and Webcast
Event Summary:
On September 15, 2025, the Global Taiwan Institute (GTI) hosted a seminar entitled “Taiwan’s China-Free Drone Production: Successes and Continued Challenges.” The discussion featured three speakers: Matthew Fulco, business editor for Aviation Week magazine; Lotta Danielsson, Executive Vice President of US-Taiwan Business Council; and Hong-Lun Tiunn, deputy director of the National Security Program at DSET (Research Institution for Democracy, Society, and Emerging Technology). The event was moderated by GTI Operations Associate Jonathan Harman.
Matthew Fulco presented on the state of Taiwan’s drone industry, expressing that its still in its nascent stage, despite the island’s strong background in electronics and semiconductors. Production has ramped up—3,426 UAVs were built in the first four months of 2025, nearly equaling all of 2024’s output—but this is tiny compared to Ukraine’s goal of 4 million per year and China’s capacity of 500,000 per month. Taiwan aims to scale up to 30,000–80,000 annually by 2030, but reaching this target will require overcoming significant scaling and cost challenges. Government support is robust, with the Drone Industry Alliance (TEDAPOA) promoting partnerships abroad, including with U.S., European, Japanese, and Indian firms. Security concerns over Chinese drones (e.g., DJI) create openings for Taiwan to position itself as a trusted supplier in democratic markets. Europe has emerged as a key growth area, with Poland, Germany, and the Czech Republic becoming top importers due to their increased defense needs related to Ukraine. Ultimately, drones are not a silver bullet for Taiwan’s defense, but as part of a broader system, they can strengthen deterrence, diversify exports, and reduce dependence on China-dominated supply chains
Lotta Danielsson gave an overview of the primary challenges facing Taiwan’s nascent drone industry. Internally, Danielsson applauded Taiwan for including drones in its latest defense budget and military training, but pointed out that Taiwan still suffers from having insufficient talented individuals specializing in drones. She noted that compared to a well-established industry like semiconductors, the career prospects of drone technology are still uncertain, which discourages Taiwanese students from choosing drones as their area of study. Externally, Taiwan has a good reputation as a trustworthy partner and ally, but would benefit from more collaboration with US drone companies and the US government. However, Danielsson points out that shifting drone manufacturing out of China is time-consuming and expensive, and the US government doesn’t have a transparent system for choosing which foreign drone companies it buys from. For now, she recommends that Taiwan’s government focus on supporting this new industry with programs like funding for drone research, better tax incentives for on-shoring international drone companies, formalized cybersecurity certification, drastically increasing Taiwanese airspace available for flying drones, and government procurement for Taiwanese drone companies which will likely be sanctioned by China.
Hong-Lun Tiunn presented his research on drone production in Taiwan, highlighting that Taiwan is rapidly scaling its drone production, now manufacturing 8,000–10,000 per month, with the Ministry of National Defense committing to procure 50,000 in 2026–2027. He proclaimed that Taiwan is best positioned for co-production with the U.S. on small drones (Groups 1–3), while larger systems (Groups 4–5) remain limited to sub-system integration and sustainment due to the lack of a final assembly framework. His take on Taiwan’s limited market access, stating that its constrained position leaves it excluded from the U.S. Blue/Green lists, meaning its drones cannot be sold to the U.S. market despite small-scale partnerships. Industrial challenges persist, including weak MND–private sector coordination and supply chain risks from Chinese pressure on Taiwanese chipmakers. Politically, drone development is slowed by Legislative Yuan gridlock, with the DPP pushing expansion and the KMT more cautious. Overall, he concluded that Taiwan’s near-term focus is on building a robust domestic drone industry and supply chain resilience while laying groundwork for future international co-production and export opportunities. At the same time, Taiwan must reform its airspace regulations and clarify military operational concepts to fully unlock both the commercial and defense potential of its drone sector. HWith a shifting policy environment in the United States, co-production of drones would strengthen Taiwan’s defense resilience while pre-positioning production capacity for the U.S.