Taiwan promulgates unmanned systems act, but expert urges further support

The Presidential Office has promulgated the legislature's unmanned systems act, which an expert said could help stabilize confidence among Taiwanese firms, but would require further government support.

The act

The Executive Yuan said on Sept. 11 that Premier Cho Jung-tai (卓榮泰) had countersigned the Act for Strengthening Defense Self-Reliance and Developing the Unmanned Vehicle Industry, which the Legislative Yuan passed on Aug. 27.

Executive Yuan Secretary-General Chang Tun-han (張惇涵) said the legislation was not the version originally proposed by the Cabinet, but that “national defense security cannot wait, and industrial upgrading cannot wait.”

The Presidential Office issued a presidential order promulgating the act the same day. Most provisions will take effect on March 11, 2027, six months after promulgation, while Article 4, which governs funding, took effect immediately. 

The version passed by the Legislative Yuan designates the Ministry of Economic Affairs (MOEA) as the competent authority, while the Ministry of National Defense (MND) will oversee military procurement. It provides for NT$240 billion (about US$7.6 billion) over six years to promote domestically produced unmanned systems, dual-use military-civilian testing sites, trusted supply-chain certification and defense self-reliance, with the total and annual allocations allowed to be increased if needed.

The act also requires the Executive Yuan to establish a National Strategic Special Committee for Unmanned Vehicle Industry Development, to be chaired by the vice premier. The committee will coordinate policy across ministries, review industry-development guidelines and major policies, and include 15 to 19 members, with at least half to be scholars or experts recommended by Legislative Yuan caucuses and selected by the competent authority. 

Chang said that following the premier's countersignature and the president's promulgation, the governing team would uphold two principles: protecting the Executive Yuan's budgetary authority by appropriating funds according to actual needs, and ensuring the strictest protection of state secrets.

He said the special committee would focus on industrial development, while matters requiring defense expertise must remain within the defense system. On issues involving state secrets, military deployments, information and supply-chain security, the government would apply the strictest standards.

“Where information should be made public, we accept oversight; where confidentiality is required, we will hold the line,” Chang said.

A political compromise

Kuo Yu-jen (郭育仁), director of the Institute of China and Asia-Pacific Studies at National Sun Yat-sen University, told TCN that the Executive Yuan’s decision to countersign the legislature-approved act reflected a compromise shaped by industrial realities and political pressure.

Kuo said Taiwan's drone sector could face an outflow of talent, technology and companies, and lose its existing development momentum, if the government fails to invest resources at this critical stage.

He noted that the United States and Ukraine have both actively sought to attract Taiwanese drone manufacturers to establish facilities locally. The US, he said, is also planning drone-industry clusters modeled on Taiwan’s science parks and has been in contact with Taiwanese companies.

Kuo said he had recently received three requests from US counterparts seeking cooperation with Taiwanese firms.

For Taiwanese companies, he said, overseas expansion may become a practical choice if the domestic market lacks sufficient orders, testing environments and institutional support.

Challenges in the current version

Kuo said the legislature-approved act will be implemented through regular government budgets, with a six-year framework and annual appropriations of NT$40 billion in principle. 

This differs from the Executive Yuan’s original NT$210 billion special-budget proposal in terms of funding source, intended use and policy objectives.

Regular annual budgets, he said, are more vulnerable to overall fiscal constraints, while drone technology evolves at an exceptionally rapid pace, often measured in weeks, as new products quickly replace older models. Kuo said an annual NT$40 billion allocation may therefore prove inadequate for both industry and defense requirements.

Kuo also said the division of responsibilities between the MOEA and the MND could create a “two-headed carriage” problem, making interagency coordination more difficult and potentially slowing technological and industrial development.

The Cabinet’s original proposal would have put the MND in charge, which Kuo said would have better matched practical defense needs while taking industrial conditions into account.

Drones are highly dual-use products, he said, and the industry cannot be developed solely from the MOEA’s perspective. It must remain closely integrated with the Defense Ministry’s operational needs, extreme-environment testing and specifications for specialized missions, Kuo added.

Kuo noted that one of the industry’s principal concerns is that the two ministries could develop divergent approaches to interagency coordination, procurement specifications and resource allocation.

Challenges for Taiwanese drone firms

Kuo said Taiwan’s drone industry currently faces two major constraints.

First, he noted, the government has yet to fully open up, or clearly define, demand for military and civilian applications, making it difficult for firms to gauge market scale and product direction. 

Second, Kuo said, Taiwan still faces institutional restrictions on land, sea and air testing sites, as well as regulations governing the import and use of sensitive materials.

Kuo said some firms have sought their own breakthroughs since 2023, including by conducting field tests in Ukraine.

He reiterated that drone development must be closely linked to defense operational requirements, demanding test conditions and specialized mission specifications, rather than being treated solely as an industrial policy issue.

Keeping the industry in Taiwan

Kuo said most Taiwanese drone companies still hope to keep their operations rooted in Taiwan. He noted that industry representatives had urged the government to support the act before the Executive Yuan decided whether to countersign it, saying firms want to keep developing in Taiwan rather than be compelled to relocate to the US or Ukraine.

However, he said the current act can only provide companies with a basic measure of confidence for now. 

He suggested the government should consider more proactive fiscal and institutional measures, including a separate special budget, expanded procurement demand across ministries, a comprehensive testing-site system, and faster action on sensitive-material regulations and integrating military and civilian specifications.

The immediate priority, Kuo said, is “to ensure Taiwan does not miss its window of opportunity.”