Taiwan advances NT$210 billion drone bill as experts urge faster capability build-up

Taiwan's Executive Yuan on June 18 approved a draft act allocating up to NT$210 billion (US$6.7 billion) to procure indigenous drone systems, sending it to the Legislative Yuan for review.

Taiwanese security experts said the country must accelerate efforts to build a comprehensive drone force to strengthen its deterrence and asymmetric warfare capabilities.

Special act on drones

The Executive Yuan said the bill — formally the Special Act for the Procurement of Indigenous Defense Unmanned Systems — would fund coastal surveillance drones, coastal strike drones and small suicide unmanned surface vessels between 2026 and 2031.

Premier Cho Jung-tai (卓榮泰) said Taiwan urgently needs to enhance its domestic production capacity for critical drone components to achieve local supply, indigenous manufacturing, and self-sustaining maintenance capabilities. 

Such efforts would help ensure defense self-reliance, sustain military readiness, and strengthen defense resilience during a transition from peacetime to wartime operations, Cho said.

Cho added that beyond their military value, unmanned systems encompass a wide range of industries, including vehicle manufacturing, battery systems, optical sensors, artificial intelligence, communications equipment, software development, and maintenance services. 

Cho said the initiative is expected to stimulate the domestic drone supply chain, boost economic growth, and help establish drones as a new strategic industry capable of generating both defense and economic benefits.

Kuomintang to introduce its own version

Opposition leader Cheng Li-wun (鄭麗文) stated that the Kuomintang (KMT) will introduce its own version of the legislation.

KMT member and Taipei Mayor Chiang Wan-an (蔣萬安) said the party caucus would put forward its own proposal and that issues involving national security, industrial development, and fiscal responsibility should be thoroughly debated in the legislature. He pledged his support for the effort.

Meanwhile, Taichung Mayor Lu Shiow-yen (盧秀燕), who is widely viewed as a potential presidential contender for the KMT, described the drone industry as Taiwan's next "competitive moat" industry after semiconductors and chips. 

She expressed support for the KMT's proposal and welcomed alternative drafts from other lawmakers, saying that bipartisan consultation could help create the most favorable legal framework for national industrial development.

A critical strategic breakthrough

Kuo Yu-jen (郭育仁), director of the Institute of China and Asia-Pacific Studies at National Sun Yat-sen University, told TCN the drone legislation concerns not only Taiwan's future national security and strategic autonomy but also the development of what could become the island's next strategic pillar industry. 

He said both ruling and opposition parties should support the initiative from the perspective of Taiwan's overall national interests.

Kuo said Taiwan's drone industry has demonstrated remarkable growth potential over the past three years. 

With adequate government support, he said, the sector could become both a new "competitive moat" industry and a key strategic tool for narrowing the military imbalance across the Taiwan Strait.

Drone development is no longer solely a defense issue, Kuo said. It is also tied to national security, industrial upgrading, economic growth, and cooperation with partners such as the United States and Japan, he added.

He cited a recent report by the Center for a New American Security, which said drones could help Taiwan implement a "hellscape" defense concept designed to complicate any potential invasion. However, he stressed that such a strategy would require drones in sufficiently large numbers.

Kuo noted that numerous US and Ukrainian officials and military experts believe that Taiwan should maintain between 300,000 and 400,000 operational drones. 

Yet many observers remain puzzled as to why Taiwan, despite possessing the necessary industrial foundation, has not developed drone production on that scale, Kuo said.

Taiwan's next "competitive moat" industry

Kuo said quantity alone is not enough; drones must also incorporate intelligent capabilities, an area in which Taiwan's technology sector holds significant advantages.

He pointed out that Taiwan possesses a complete supply chain spanning upstream, midstream, and downstream industries, including flight-control chips, communications modules, printed circuit boards (PCBs), semiconductors, and precision manufacturing. 

In theory, he said, Taiwan is fully capable of developing drone systems tailored to future battlefield requirements.

The drone sector, Kuo added, combines the strengths of both traditional manufacturing and advanced technology industries. 

He compared its potential to Taiwan's rapid mobilization of a "national mask team" during the COVID-19 pandemic, which demonstrated the resilience and integration capabilities of the island's private sector.

"The drone industry could very well become Taiwan's next strategic industry after semiconductors," Kuo said.

Time is critical

Shen Ming-shih, a research fellow at Taiwan's Institute for National Defense and Security Research (INDSR), told TCN drones are not merely platforms to be procured but future warfighting tools.

Once the legislation is passed and large numbers of drones enter service, Shen said, the military must simultaneously develop operational manuals, tactical doctrines, combat procedures, and training programs, while integrating drone operations into military schools and professional education systems.

Shen noted that although the armed forces have already established drone-related units, many still lack sufficient equipment. 

Without enough drones, Shen said, troops cannot conduct realistic field training and must rely on limited equipment or single-platform exercises, making it difficult to generate genuine combat capability.

As a result, he said that drone procurement is highly urgent and that systems should be distributed to operational units as quickly as possible to allow personnel to gain experience through training and exercises.

"It will take approximately three to five years for Taiwan to fully develop comprehensive drone combat capabilities," Shen said.

Challenges remain

Despite optimism about Taiwan's drone capabilities and industrial potential, Kuo said that the biggest obstacle is not manufacturing capacity but inadequate regulations and infrastructure.

Taiwan already has more than 260 drone companies, he said, yet one of the industry's most persistent complaints is the lack of legal and practical testing grounds.

Because regulatory revisions have failed to keep pace with industry development, Kuo said, companies face difficulties conducting large-scale testing and validation. 

Kuo said that, given the broad range of drone applications, different operational environments are needed, making the shortage of testing facilities a significant constraint on industry growth.

Kuo suggested that the government could look to the model of the Hsinchu Science Park and establish dedicated drone industrial parks or clusters.

As the drone industry continues to expand, he said, it will inevitably develop into a comprehensive supply-chain ecosystem. 

The government therefore cannot rely solely on private-sector initiatives but must also invest in supporting infrastructure, including transportation networks, export-control mechanisms, workforce development programs, and updated regulatory frameworks.

Budget may still be insufficient

Regarding the Executive Yuan's proposed NT$210 billion drone development budget over five years, Kuo described the amount as "a drop in the bucket."

He said much of the industry's growth has been driven by private companies and that current government spending merely addresses infrastructure investments that should have been made years ago.

Blocking the legislation for political reasons, he said, would not serve Taiwan's broader national interests.

Kuo further noted that, based on recommendations from US experts, Taiwan may need to maintain 300,000 operational drones while holding an additional 150,000 in wartime reserve, creating a total inventory of more than 450,000 drones. 

Achieving such a goal would require a massive manufacturing and supply-chain ecosystem, underscoring the need for a more proactive government commitment of resources, Kuo said.