Taiwan Drone Exports Soar On Ukraine War

The vast majority went to the Czech Republic, followed by Poland. DSET believes most units are bought or funded by charitable organisations and donated to Ukraine.

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

"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 AI 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.

"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 a nearly $40 billion defence spending proposal has been blocked in parliament, hindering progress.

Taiwanese companies also 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, head of the Taiwan office of the European Values Center for Security Policy.

"Would Taiwanese drones be combat-ready?"

- Cut-throat 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 flood the market with its own units.

Competition is "cut-throat" and growing fast, said Collin Koh, a military expert 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 localisation" 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 also wants to set up production lines in Europe 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.
-AFP