By AFP and Focus | 2026-05-27

TAIPEI -- Taiwan's drone exports are taking off, fueled by the war in Ukraine, as Taiwanese companies seek a stake in the fast-growing global market for unmanned aerial vehicles (UAVs).

Low-cost drones used for reconnaissance and strikes are in high demand as governments around the world boost defense spending in the face of intensifying conflicts.

A relative new player in the increasingly competitive industry, Taiwan markets itself as an "Asian hub" for the production of UAVs and components free of Chinese materials, or "non-red."

Its UAVs can cost up to three times more than those from their Chinese competitors, like the world's biggest manufacturer DJI, which benefit from their massive scale.

Nevertheless, Taiwanese companies have recorded a surge in sales as Russia's full-scale invasion of Ukraine, where both sides use drones extensively, drives demand.

China's export restrictions on drones in recent years have opened up an opportunity for Taiwanese firms. They have been struggling to secure sufficient sales at home.

"Domestically there's not enough demand," said Samara Duerr, a policy analyst at the Research Institute for Democracy, Society and Emerging Technology (DSET), a Taiwanese government-backed think-tank.

"So, it's reaching internationally to help bring scale and experience so that it has this capacity and knows how to have a surge ability later on."

Non-red market

Taiwan's drone exports soared to 181,159 units in the first four months of this year, nearly 20 times higher than the same period of 2025, and more than the entire year of 2025, official trade data show.

The vast majority went to Czechia, followed by Poland. Most units are bought or funded by charitable organizations that then donate them to Ukraine, says DSET.

Max Lo, chairman of AeroSoarX, which makes military and dual use drones, said Taiwanese companies had to look abroad to stay viable.

Although Taiwan is trying to build a domestic drone industry, budget holdups in the opposition-controlled parliament means government orders are not keeping pace.

"If we don't have the local demand, government support or budget, how can we sustain the production line?" said Lo.

"That's the reason I visit Ukraine; I visit Poland. I let them know, okay, we have this or that; we have production still available."

'Drone shield'

Taiwan is a global powerhouse in artificial intelligence technology and semiconductor chip manufacturing, and hopes to build on that experience in the drone industry.

The island aims to have a monthly production capacity of 100,000 drones by 2030, compared with its previous target of 15,000 by 2028.

Chiou Chyou-huey, director general of the Industrial Development Administration, said the "vast majority" of Taiwan's drone exports were non-red, but several industry insiders told AFP that they suspect most of them are not.

Taiwan wants to be able to produce enough drones on its own to repel a potential attack from China, which claims the island is part of its territory, and embed itself into global UAV supply chains, as it has done with chips.

"We call it the drone shield," said Lo. "That will become another protection (for Taiwan)."

But the government's plan to procure more than 200,000 Taiwanese-made drones as part of an almost $40 billion defense spending proposal has been blocked in parliament.

Parliament in May approved a much leaner $25 billion package that omitted funding for domestic drones.

Taiwanese companies face challenges breaking into a market already dominated by China -- and their drones and components lack battlefield experience.

"Even though it is hard to question Taiwan's industrial prowess, it is all about this question of practical application," said Marcin Jerzewski, director of the Taiwanese office of the European Values Center for Security Policy.

"Would Taiwanese drones be combat-ready?"

Cutthroat competition

Another issue is that Ukraine, which has become one of the most advanced UAV manufacturing hubs in the world, could stop needing Taiwanese drones once the conflict is over and could flood the market with its own units.

Competition is "cutthroat" and growing fast, said Collin Koh, a military analyst at the S. Rajaratnam School of International Studies in Singapore.

"Taiwan will have to find its niche," Koh told AFP.

Where Taiwan can compete against China is in "micro components" such as lithium-ion cells, said Artur Savchii, an analyst at Snake Island Institute, a Ukrainian think-tank.

"That's where Taiwan can replace China, and I think this is a big area for cooperation," Savchii told AFP.

Ultimately every region is striving for "maximum localization" of supply chains, Yaroslav Azhnyuk, founder of Ukrainian drone company The Fourth Law, said.

Taiwanese drone makers are increasingly partnering with companies abroad, as they carve out a place in the non-red market.

Among them is Thunder Tiger, which has a joint venture to make drone motors in the US state of Ohio.

General manager Gene Su said he sees the biggest opportunities in the United States, where concerns over Chinese security threats are driving demand for non-red drones and components.

Thunder Tiger wants to set up production lines in Europe too, but countries there are more price sensitive, Su said.

"Once we're getting bigger, our costs are lower, and then we can compete with the Chinese," he said.